Corn futures are 3 to 7 cents lower on slowed demand and negative outside markets.
- A combination of strength in the U.S. dollar index, sharply lower crude oil futures and demand destruction is weighing on corn futures this morning.
- This morning's weekly export sales data showed sales well below expectations. Sales of 51,600 MT for 2012-13 and net sales reductions of 4,200 MT for 2013-14 were a big disappointment.
- Conab projects Brazil's corn crop at 71.9 MMT, near the bottom of its previous crop range of 71.6 MMT to 72.9 MMT.
- Meanwhile, Gulf corn basis is steady to firmer for February and March delivery, which reflects a tight supply situation.
- March corn futures remain supported by the 50-day moving average, which currently lies at $7.47 1/2.
Soybean futures have softened from earlier levels to trade mixed.
- Negative outside markets have shifted traders' focus to profit-taking with the start of open-outcry trade. The U.S. dollar is sharply higher and crude oil futures are sharply lower.
- Additional pressure comes from a reminder of the potential for Brazil to produce a record soybean crop. Conab projects Brazil's 2013 soybean harvest at 82.6 MMT, saying conditions are favorable. Previously, Conab pegged the crop between 80.1 MMT and 83 MMT.
- Still, this morning's weekly export sales data showed soybean sales well above expectations. Sales of 1,142,700 MT for 2012-13 and 1,100 MT for 2013-14, with China again the lead buyer, remind traders that current prices are not slowing use.
Chicago and Kansas City wheat are mostly 2 to 3 cents lower, with Minneapolis narrowly mixed.
- Strength in the dollar index and neighboring markets moving off their highs is weighing on wheat futures this morning..
- But ongoing concerns about drought in the U.S. Southern Plains is keeping crop concerns on traders' minds. This morning's National Drought Monitor reflects worsening drought in the HRW wheat belt.
- But to re-ignite market bulls, a boost in export demand is needed. Weekly export sales of 353,100 MT were a disappointment, as the tally came in below traders' expectations.
- March Chicago wheat futures are hovering above support at this week's low of $8.51 1/2.
Live cattle futures are choppy with a slight downside bias, with feeder cattle futures firmer on weakness in corn futures.
- Price action in live cattle futures is choppy as traders wait on cash cattle trade to begin. Cash trade will likely be delayed until tomorrow, as feedlots balked at packers' initial bids of $123. Cash sources are still hopeful they will move cattle at steady money with last week's $125 to $126 trade.
- Negative outside markets are limiting buying in live cattle futures, although the Dow Jones Industrial Average is slightly firmer.
- Weekly export beef sales of 14,000 MT for 2012 were an improvement from last week's tally of 11,800 MT.
Lean hog futures are moderately to sharply lower on concerns about the cash market.
- The cash hog market is mostly steady this morning, but traders expect a near-term high is in the works due to worsening packer margins.
- Packers say they have supplies secured for a large Saturday kill, which signals reduced demand for cash supplies the remainder of the week.
- Given pressure on December hog futures this morning, the contract now holds less than a dollar premium to the cash index ahead of next week's expiration. February hogs are trading at around a dollar premium to the index and will soon have the responsibility of following the cash market more closely once December expires.