Corn futures improved with the open of pit trading to trade mostly 1 to 2 cents higher in old-crop futures while new-crop futures are mixed.
- Nearby corn futures have benefited from some light short-covering encouraged by recent signs export demand is at long-last improving.
- USDA announced a 127,000-MT corn sale to an unknown destination this morning. Of the total, 50,800 MT is for 2012-13 and 76,200 MT is for 2013-14.
- Gulf basis firmed for immediate delivery this morning, signaling more demand news may lie ahead. Basis did soften 3 cents for May delivery, however.
- But the precip associated with the approaching winter storm event is limiting gains as this is favorable for dry Midwest soils.
- Last week's reminder that USDA expects production to rebound sharply in 2013-14 remains a limiting factor for buying enthusiasm.
Soybean futures have softened to post double-digit losses in old-crop futures, while new-crop futures are mixed with a downside bias.
- Traders are focusing on rains in central Argentina over the weekend with scattered showers in the forecast for southern Brazil this week. Plus, the dockworker strike in Brazil has been averted for the time being.
- This easing of South American concerns has lead to profit-taking today.
- Traders are ignoring another daily soybean sales announcement. USDA reported China bought 120,000 MT of U.S. soybeans for 2013-14.
- Steady to firmer Gulf basis levels this morning signals tight supplies and ongoing export demand strength.
- Similarly, traders are brushing off news AgRural trimmed its Brazilian bean crop estimate by 1 MMT to 82.2 MMT due to a lack of rain in Bahia. This still represents a record crop.
Wheat futures have pared losses to 2 to 3 cents in Chicago and Kansas City while Minneapolis wheat is mixed with a downside bias.
- Heavy rain and snow in the Southern and Central Plains is putting light pressure on the wheat market, as precip is favorable for dry soils in these regions.
- Plus, the markets' move to new eight-month lows today has encouraged some technical selling.
- But recent signs export demand is improving are limiting pressure. Traders will watch this morning's export inspections report for signs this is continuing.
- Spillover from corn and friendly outside markets are also limiting pressure.
Live cattle are off to a slightly to moderately firmer start with nearby contracts leading gains. Feeder cattle are also enjoying slight to moderate gains in most contracts.
- Live cattle futures are seeing some bull spreading after Friday's Cattle on Feed Report showed Marketings and Placements above expectations and year-ago levels, while On Feed came in around expectations at 94%.
- Additional support comes from the blizzard in the Southern Plains. This will stress livestock and is disrupting travel.
- Light support also stems from firmer cash cattle trade on Friday at $125 compared to $123 sales earlier in the week. Nearby futures are already at least $2 above these prices, however.
- Boxed beef prices were mixed Friday and movement was unimpressive at 170 loads. Improvement will be needed to encourage firmer trade again this week.
- Outside markets are also providing light support to livestock futures as the U.S. dollar index is weaker and the stock market and crude oil futures are firmer.
- Feeder cattle futures are benefiting from spillover from live cattle and ideas the downside has been overdone.
Lean hog futures are slightly lower this morning.
- Lean hog futures are under pressure as traders digest Friday's Cold Storage Report. It showed frozen pork stocks at the end of January at 605.266 million lbs., which was near expectations but up 3.4% from last year.
- Meanwhile, cash hog bids are steady to lower today as packers are thought to be well supplied for near-term needs.
- Plus, the pork cutout market failed to impress Friday as the pork cutout value slid 21 cents and movement was light at 33.58 loads.
- But downside risk is limited amid concerns about an approaching winter storm and the technically oversold condition of the lean hog market.