Corn futures have softened to mixed trade with old-crop futures around 3 cents higher and deferred months narrowly mixed.
- Traders are covering short positions ahead of an extended holiday weekend amid ideas the downside has been overdone this week.
- Recent improvement in Gulf basis levels is also encouraging to that end. This morning, Gulf basis was a penny higher for June delivery and steady for other months.
- But rain in the five-day forecast for southern Brazil has also encouraged some profit-taking as this is beneficial for planting the safrina corn crop.
- Argentina is also expected to receive rain which is benefiting the pollinating corn crop.
Soybean futures softened with the open of pit trading to narrowly mixed trade, with old-crop futures favoring the upside and deferred months the downside.
- Soybeans found early support from short-covering on ideas the downside has been overdone this week. But that has since given way to some profit-taking.
- USDA's announcement that unknown destinations had canceled 250,000 MT in soybean orders for 2012-13 was encouraging of this as it reminds the market demand for U.S. beans will likely fade in the weeks ahead as South American supplies come available.
- In addition, both Argentina and southern Brazil are expected to receive beneficial rains over the next five days.
- Steady Gulf basis and mixed outside markets provide little direction.
Wheat futures continue to enjoy gains of around 3 to 7 cents this morning.
- Wheat futures are benefiting from recent signs U.S. prices have reached prices that are finally attracting export demand.
- Weekly wheat export sales topped expectations yesterday and the market today learned that Brazil purchased 100,000 MT of U.S. HRW wheat and Japan purchased 61,568 MT of U.S. wheat.
- Gulf basis slid 3 cents for February and March delivery this morning, but it was steady to 2 cents higher for other months this morning.
- Traders are also engaging in some short-covering ahead of the extended holiday weekend.
- While the five-day forecast is dry for the Southern and Central Plain, the 6- to 10-day outlook calls for above-normal rain chances.
Live cattle futures are posting slight to moderate losses, with the exception of the April contract, which is slightly higher. Feeder cattle futures are mostly moderately lower.
- Traders are booking profits ahead of an extended weekend after futures posted late-session gains yesterday.
- Cash cattle trade is thought to be complete after additional cash cattle trade at $123 yesterday, which is down $2 from the bulk of last week's trade
- But tightening supplies and expectations for demand to soon improve limit traders' willingness to add short positions.
- Boxed beef price action and movement has been quite varied this week. Yesterday, Choice cuts slid 15 cents and Select values rose 28 cents. Movement was slow at 146 loads.
- Strength in the corn market is putting bears in control of the feeder cattle market again today.
Lean hog futures are posting slight losses this morning.
- Demand concerns are putting light pressure on lean hog futures to wrap up the week.
- Recent declines in the pork market have kept packer profit margins buried in the red. Thus, cash hog bids are again steady to lower today. Plus, some are preparing for a holiday-shortened kill next week.
- But the pork cutout value did improve 14 cents yesterday and movement was solid at 99.25 loads. But in light of the market's struggle to put in a low, much more improvement will be needed to boost confidence in the product market.
- Downside risk is also being limited by the fact that futures are technically oversold.