Corn futures are posting losses of 1 to 3 cents in most contracts this morning.
- Early gains and trade above the $4.50 level in the front-month contract spurred a round of profit-taking. March futures have recently found solid support in the $4.45 area.
- Interior and Gulf basis levels are holding up due to icy conditions on rivers that have slowed movement of supplies needed for export.
- Gulf corn basis firmed 3 cents for immediate delivery and was steady to 3 cents higher for deferred delivery. This keeps strong export demand in focus.
- Also limiting pressure is talk USDA's projection for a record corn yield is too optimistic.
Soybean futures have improved to trade 1 to 4 cents higher in old-crop futures, while new-crop futures are narrowly mixed amid bull spreading.
- Soybean futures saw some early light profit-taking following yesterday's strong gains. But selling interest is light as the chart posture remains bullish and the market received highly favorable demand news today.
- USDA announced an unknown destination purchased 568,000 MT of old-crop U.S. soybeans, which could reflect some nervousness about logistical issues in Brazil.
- This follows a strong export inspections report yesterday.
- Also, damage to a shiploader at Brazil's second largest soy port could further disrupt shipping of the nation's crop.
- The recent surge in prices has resulted in an increase in the farmer sales.
- But the March contract is nearing the contract high at $13.99 3/4 and psychological resistance at $14.00, which will be tough for bulls to penetrate.
- And buying in new-crop futures is being limited by expectations of record production this year.
Wheat futures have softened to trade 7 to 12 cents lower in the SRW market, while HRW wheat is 2 to 6 cents lower and HRS is mostly 3 to 5 cents lower.
- News Egypt canceled 110,000 MT of U.S. SRW wheat for 2013-14 has increased pressure on the wheat market today.
- Traders are also engaging in some profit-taking after recent gains.
- Traders are also encouraged by the fact that bitter cold is expected to remain isolated to the Northern Plains.
- Pressure also stems from a 2 to 5-cent slide in Gulf HRW wheat basis for February and March delivery and a 4-cent slide in Gulf SRW wheat basis for March delivery. This could signal prices have reached levels that are slowing demand.
Live cattle futures are slightly to moderately higher this morning. Feeder cattle futures are mixed with nearby contracts favoring the upside.
- The ongoing surge in the boxed beef market is giving bulls an edge in the cattle market today.
- Choice and Select cuts firmed $2.07 and $1.79, respectively, yesterday. However, movement slowed to 128 loads.
- The run-up in cattle prices along with slowed beef movement on higher prices has some watching for a top in the cattle market.
- While gains in the wholesale beef market could give feedlots an edge in cash negotiations, showlist estimates are up overall this week, with gains in Kansas and Texas offsetting declines in Nebraska and Oklahoma. This favors packers.
- April live cattle are trading in line with the upper end of last week's trade in the Southern Plains.
- Feeder cattle futures are benefiting from strength in live cattle.
Lean hog futures are mixed with slight gains in most contracts.
- The April lean hog contract is again setting new contract highs. The chart posture remains bullish, but the market is also overbought.
- Traders are showing little concern about the $8-plus premium the front-month contract holds to the cash hog index, as it's a long time until the contract expires.
- Deferred months are favoring the upside in choppy trade thanks to strength in the product and cash markets.
- The pork cutout value firmed $1.23 yesterday, but only 234.98 loads changed hands.
- Meanwhile, packers are paying steady to higher prices for market-ready supplies as they are short-bought and planning a large weekend kill to take advantage of positive margins. This is the first time in an extended period packers have not had poor road conditions to contend with.
- Traders remain concerned about the spread of the porcine epidemic diarrhea virus (PEDV) and its impact on spring and summer marketings when supplies are at their tightest of the year.
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