Corn futures are enjoying gains of 3 to 4 cents in most contracts.
- Corn futures are enjoying some followthrough buying after a number of contracts hit or tested 2014 highs yesterday.
- Gains in old-crop soybean futures are adding spillover support, though buying is being tempered by strength in the U.S. dollar index.
- The market is also benefiting from recent signs of rebuilt demand. However, there is uncertainty about how much prices can rise before demand is curbed.
- Light support also stems from concerns about heat and dryness in southern Brazil.
Soybean futures are 8 to 12 cents higher in old-crop futures, while September is up 5 cents and new-crop futures are around a penny higher.
- The soybean market is seeing bull spreading activity as traders weigh strong demand and some South American weather concerns against ideas soybean acreage will increase for the 2014 growing season.
- The March contract's move through psychological resistance at $13.00 triggered some technical buying interest.
- Concerns about heat and dryness in southern Brazil when some of the crop is filling pods is lifting old-crop futures.
- The market is also benefiting from the fact that China has not yet canceled any significant amounts of its U.S. bean buys, despite the fact that Brazil is beginning to ship some early harvested beans.
SRW and HRW wheat futures are mostly 10 to 13 cents higher, while HRS wheat is up 8 to 10 cents.
- Heightened crop concerns are lifting the wheat market today. The Southern and Central Plains are dealing with yet another blast of cold temps, though this time it is accompanied by wintry precip.
- Adding to concerns are state crop condition updates that reflect significant deterioration to the winter wheat crops in Texas, Kansas and Oklahoma.
- In Texas, the amount of wheat rated "poor" to "very poor" rose 4 percentage points to 41%. In Kansas, 20% of the crop is rated "poor" to "very poor" -- a 14 percentage point increase from last month. And 24% of the Oklahoma crop is now rated in the bottom two categories.
- Statistics Canada reports total wheat stocks as of Dec. 31 at 28.381 MMT, which is the highest in 20 years, but below the average pre-report trade guess of 28.9 MMT.
Live cattle futures are narrowly mixed in early trade. Feeder cattle futures are slightly lower.
- Live cattle futures are seeing a mix of followthrough selling and corrective short-covering this morning.
- On one hand, the steep decline in the boxed beef market continues to support ideas prices rose too far too fast, warranting a correction. And light movement of just 122 loads yesterday signals prices have not yet reached value levels.
- But on the other hand, nearby futures are $4 to $5 below last week's cash cattle trade at $144 to $145. While steady to lower trade is anticipated, any decline is unlikely to be that steep.
- Showlist estimates are down at all locations this week, including a 30,000-head drop in Nebraska. Also, a winter storm event is expected to make transportation of animals more difficult.
- Very light cash cattle trade took place in Texas yesterday ahead of the winter storm event at $142.50, but active trade is not expected until late-week.
- Strength in the corn market is giving bears the advantage in feeder cattle futures.
Lean hog futures are posting slight gains this morning.
- Lean hog futures are enjoying some corrective short-covering amid ideas the downside was overdone yesterday.
- Supporting such ideas is continued improvement in the cash market. Winter weather for the Corn Belt today is again supporting cash hog bids. However, unfavorable conditions have also point to lower slaughter schedules for the weekend.
- Recent gains in the cash market and pressure on futures has narrowed the gap between the cash hog index and February futures to less than $3.
- Light support also stems from a 56-cent gain in the pork cutout value yesterday, though movement was again relatively light at 236.24 loads.