Corn futures are split this morning on bull spreading with nearbys marginally higher and deferred months slightly lower.
- Fresh news is lacking today, which is limiting both buying and selling interest in the corn market.
- Light support comes from signs export demand may be improving. Yesterday's weekly export inspections were the highest in months and Gulf basis firmed for near-term delivery yesterday. They are steady today.
- Plus, heat and dryness is raising concern about Argentina's crop, though there is some rain in the forecast later this week. Recent updates have scaled back coverage areas, however.
- Gains are also being limited by expectations for large corn plantings in 2013 along with improvement in Corn Belt soil moisture deficits, though much more is needed.
- A weaker U.S. dollar index on strong home price data is also providing light support to nearby contracts.
Soybean futures firmed with the open of pit trading to trade 7 to 10 cents higher.
- Traders are building some weather premium into prices amid concerns about heat and dryness in Argentina and Southern Brazil. Northern Brazil continues to enjoy favorable weather, however.
- Concerns about the logistics of getting South American supplies shipped are also building, though major soy exports are still a few weeks away.
- A fairly regular stream of daily soybean sales announcements keeps strong soy export demand for a tight U.S. crop in focus.
Wheat futures have improved slightly to trade 4 to 5 cents higher in Chicago, around 6 cents higher in Kansas city and roughly 2 to 4 cents higher in Minneapolis.
- Light short-covering in the wheat market picked up as soybean futures firmed this morning.
- Support also comes from a reminder of tight Black Sea region supplies. Today, Russia's deputy ag minister said the country will soon officially cut its 2012-13 grain export forecast from 15.5 MMT to 14 MMT and the country plans to sell another 3 MMT of intervention stocks into the domestic market.
- Plus, there is little rain in the forecast for the Central and Southern Plains and conditions in the Wheat Belt deteriorated in January.
- Outside markets are also supportive of commodity buying this morning thanks to strong housing data.
Live and feeder cattle futures are posting slight losses this morning.
- Cattle futures rallied sharply yesterday after a bullish Cattle on Feed Report and news Japan will ease its U.S. beef import restrictions. Today, traders are taking advantage of those gains by booking profits.
- But that will be the extent of selling interest as this week's early cash cattle indications point to firmer cash trade.
- Showlists estimates are sharply lower for the week and the boxed beef market got off to a favorable start yesterday with firmer prices and solid movement.
- But futures are already at a steep premium to last week's $122 to $124 trade, so near-term upside potential could be limited.
Lean hog futures are off to a narrowly mixed start, with most contracts favoring the upside.
- Tightening market-ready hog supplies made even tighter by the recent Midwest ice storm are keeping the cash hog market steady to higher. There is also some concern another snow/rain event could further disrupt transportation the second half of the week.
- Light support also comes from the 52-cent gain in the pork cutout value yesterday, though movement slowed notably to 34.13 loads.
- While this improved margins slightly, packers are still cutting in the red, limiting their willingness to raise bids.
- Pressure is also being limited by the discount the front-month contract holds to the cash hog index.