Corn futures are mostly 2 to 3 cents higher this morning.
- The corn market is enjoying mild short-covering to start the year amid ideas the downside has been overdone.
- Gains are impressive considering the surge in the U.S. dollar index this morning.
- Gulf basis firmed 1 cent for January through March delivery, signaling demand news may be ahead.
- Recent showers and more moderate temps in Argentina have eased drought concerns for the time being.
- The corn market is also seeing some spreading activity with beans.
Soybean futures are 14 to 20 cents lower through the July contract, with deferred months 4 to 10 cents lower.
- January soybeans saw followthrough selling after Tuesday's downside breakout. This took the contract through the key $13.00 support level, triggering sell stops.
- Fund rebalancing to start 2014 adds pressure, as does sharp gains in the U.S. dollar index.
- Also, crop concerns in Argentina have eased thanks to recent rains and more moderate temperatures.
- Many expect soybean order cancellations by China once a record-large South American crop come available.
- Gulf soybean basis firmed a penny for immediate delivery, while deferred months held steady.
Nearby wheat futures are posting losses around 4 to 6 cents across all three flavors this morning.
- Strength in the U.S. dollar index is weighing on the wheat market today as it adds to concerns that U.S. wheat is not competitive globally.
- Also, most expect tomorrow's Weekly Export Sales Report to confirm tepid demand, especially since it will cover demand during the Christmas holiday.
- Traders are not concerned about bitter cold in northern areas of winter wheat country as a thin layer of snow protects much of the crop.
- Thus far, the March SRW wheat contract has respected key support at $6.00.
Live and feeder cattle futures are enjoying slight gains this morning.
- Bullish cash cattle expectations and strength in the wholesale market are lifting live cattle futures as traders return from a holiday break.
- Choice boxed beef values firmed 94 cents Tuesday to $200.65 per cwt. and Select gained 95 cents to $196.41 per cwt. -- a record high for the cut. Also impressive, movement improved despite the higher prices to 176 loads.
- This along with bitter cold in northern feedlot locations are expected to help feedlots get steady to higher prices compared with last week's $132 to $134 action in the Southern Plains and $135 to $136 action in Nebraska. Feedlots are asking $135 to $137 for cash cattle on the Southern Plains.
- While showlist estimates are up from week-ago, supplies are expected to tighten going forward due to the stoppage of Zilmax sales and lower feed prices encouraging producers to retain cattle to rebuild their herds.
- Expectations for tight supplies are lifting feeder cattle futures to start 2014.
Lean hog futures gapped higher on the open and are enjoying slight to moderate gains to start the year, with nearbys leading to the upside.
- Traders are again covering short positions amid ideas the downside has been overdone in recent sessions.
- Gains in the product market add to the positive tone. On Tuesday, the pork cutout value firmed 37 cents and movement surged to 632.24 loads. This spurs optimism the pork market could be working on a seasonal low.
- Meanwhile, early cash hog bids are steady. Packers are planning a smaller Saturday kill than the week prior, but bitterly cold temps across the upper Midwest make producers unwilling to market hogs.
- Average hog weights in Iowa and southern Minnesota for the week ended Dec. 28 rose 1.7 pounds. However, the head count slid by 114,000 from the week prior.
- The market appears unconcerned about narrowing the wide premium February lean hogs hold to the cash index. The index has ticked up the past three days, also spurring talk the cash market may be working on a low.