Corn futures are 1 to 6 cents higher on help from the weekly sales report and spillover from soybeans.
- This morning's better-than-expected weekly export sales report is providing support to the corn market, as it suggests corn prices have reached a level that is spurring demand.
- The weekly export sales data showed corn sales of 361,800 MT for 2012-13 and 20,100 MT for 2013-14. Plus, Reuters reports Chinese feed mills have booked four cargoes (240,000 MT) of U.S. corn for 2013-14 this week.
- The corn/soybean price spread widened considerably this week, which is also providing some support to corn this morning, although soybean gains are still outpacing those of corn this morning.
- But news from USDA's Outlook Forum that USDA sees the potential for a 14.35 billion bu. corn crop in 2013 is limiting buying, especially as the estimate comes on a reduction in acreage from 2012. USDA says there is little correlation between drought one year and reduced yields the next.
Soybean futures saw little price change with the start of open-outcry trade as the market remains 13 to 19 cents higher.
- Soybean futures are working on sharp weekly gains that have improved the near-term technical outlook of the market. May beans have posted a fresh monthly high.
- Futures are being supported by expectations the window of opportunity for U.S. soybean exports will be opened a bit longer due to shipping delays in Brazil.
- Reuters reports Chinese importers have booked at least nine cargoes of old-crop U.S. beans this week, with some of that business switched from Brazil and some new purchases.
- But this morning's weekly export sales report is a disappointment, with net sales reductions of 119,500 MT for 2012-13 a new marketing year low. Sales of 62,000 MT were reported for 2013-14.
- USDA also announced a 410,000 MT soybean sale to China, with 60,000 MT for 2012-13 and 350,000 MT for 2013-14.
- Traders are also digesting news from USDA's Outlook Forum, USDA said its 3.405 billion bu. crop projection is based on a yield of 44.5 bu. per acre and pegs carryover at 250 million bushels.
Wheat futures are trading mostly 3 to 10 cents higher with Minneapolis contracts leading gains.
- Chicago and Kansas City wheat futures are mostly 1 to 2 cents higher on light spillover from neighboring markets. Wheat has a lot of work ahead in order to turn the negative technical picture around.
- Traders continue to note this week's better-than-expected precip event across the HRW Wheat Belt that is expected to dent the drought, although they recognize much more timely rain is needed to improve the condition of the winter wheat crop.
- But also supportive this morning is the weekly export sales data that signals importers view U.S. prices are more attractive. The report showed sales of 699,300 MT for 2012-13 and 56,600 MT for 2013-14 -- coming well above expectations.
- Traders say they want to see a continuation of strong demand news before they are convinced demand has turned the corner.
- Traders are also digesting more details of the 2013-14 marketing year from USDA's Outlook Forum. USDA says planted wheat acreage of 56.0 million and a yield of 45.2 bu. Per acre will produce a crop of 2.1 billion bu. and pegs carryover at 639 million bushels.
Live and feeder cattle futures are slightly to moderately higher on short-covering and positioning ahead of this afternoon's Cattle on Feed Report.
- Futures are enjoying some short-covering ahead of this afternoon's Cattle on Feed Report that will remind the market of the tight supply situation. The report is expected to show On Feed at 93.8%, Placements at 100.3% and Marketings at 104.7% of year-ago levels.
- Meanwhile, cash cattle trade is thought to be complete at $123 this week, which is steady with last week. February live cattle, however, are trading at around a $2 premium to the cash market.
- Feeder cattle futures are also getting a lift from short-covering, although buying is being limited by strength in the corn market.
- At its outlook forum, USDA said it expects beef production this year to be down 3% compared to year-ago and for the average cash price to be well above year-ago at $134.
Lean hog futures are mostly higher on short-covering.
- Lean hog futures are seeing support from ideas this week's losses are overdone and are due for a corrective bounce as the market is severely oversold according to the 9-day Relative Strength Index. April lean hogs are at 15% on the 9-day Relative Strength Index.
- The cash hog market is steady to $1 lower this morning amid lackluster demand for hogs. Plants were prepared for marketing disruptions today due to the winter storm.
- Packers have seen profit margins improve dramatically this week, but demand for cash hogs remains light.
- Traders will also be focused on evening positions ahead of this afternoon's Cold Storage Report, which is expected to show pork stocks at 608.2 million lbs. -- just shy of the January 2009 record.
Drought in Western Corn Belt, Plains Likely to Persist
AgDay Daily Recap -February 22, 2013