Corn futures are up 1 to 2 cents in most contracts this morning.
- Buying and selling interest are limited ahead of USDA's flurry of reports Friday.
- Bulls have a mild advantage thanks to concerns about dryness in Argentina's major production regions, though rains are forecast for the next several days.
- In addition, ideas the cold blast will increase feed demand are mildly supportive.
- Gulf corn basis is steady this morning, with the exception of a 1-cent decline for April delivery. This signals fresh export demand news is absent.
Soybean futures have improved amid some mild bull spreading. January and March futures are up 1 to 4 cents, while deferred contracts are fractionally to 3 cents lower.
- USDA's announcement that China bought 350,000 MT of U.S. soybeans for 2013-14 delivery helped the bean market trim early losses. However, active buying interest is lacking.
- Meanwhile, traders are brushing off current high temps in Argentina as the forecast calls for milder temps and some precip. However, some private crop watchers say significant damage to the bean crop has already occurred.
- Favorable weather in Brazil for crop development also harnesses bullish enthusiasm.
- Gulf soybean basis firmed a penny for immediate delivery this morning, possibly signaling more export demand news is ahead.
Wheat futures have firmed to post gains of 2 to 5 cents, with the HRS market leading gains.
- Wheat futures are benefiting from concerns about winterkill in the Plains. While many areas are insulated from the arctic blast this week, some key areas are exposed. These include much of Nebraska, southwest and south-central South Dakota and north-central Kansas.
- More seasonal temperatures are expected to move in around midweek, however, meaning such concerns will likely fade.
- Traders expect USDA to report winter wheat seedings up slightly from year-ago on Friday. This is also limiting buying interest.
- Plus, USDA is expected to remind of plentiful global wheat supplies at week's end.
- Strength in the greenback is also a limiting factor for wheat futures this morning.
Live cattle futures are facing light pressure this morning. Feeder cattle futures are narrowly mixed amid bull spreading, with most contracts posting losses.
- Live cattle futures are facing some light profit-taking as traders sort out cash prospects for this week.
- Showlist estimates are sharply higher in Nebraska but around 2,000 head tighter in both Kansas and Texas this week.
- Highly stressful weather in the Midwest and Plains this week is expected to moderate soon, but this will nonetheless take a toll on an already tight cattle supplies.
- And while the boxed beef market continues to surge, this has come at the expense of movement. This keeps concerns about retailer resistance to high prices in focus. Both Choice and Select cuts are well above the $200 per cwt. mark.
- Today's kill is expected to be up slightly from week-ago, but down from year-ago.
- Nearby futures are just below the bulk of last week's trade in Texas and Kansas at $137.
- Also limiting buying interest is mild strength in the U.S. dollar index and the slightly overbought condition of nearby contracts according to the 9-day Relative Strength Index.
- Traders in the feeder cattle market are oscillating between profit-taking and followthrough buying after several contracts posted contract highs yesterday.
Lean hog futures gapped lower this morning and most contracts are moderately lower.
- Pressure on nearby contracts stems from the wide premium they hold to the cash hog index. In addition, traders were discouraged by last week's failed rally attempt.
- Last week's gains were spurred by improvement in the cash hog market. Packers paid up for market-ready supplies last week and this week as back-to-back cold blasts slowed hog transportation. Some plants are still operating at reduced hours due to the bitter cold.
- Traders are also disappointed the product market did not join the seasonal rally attempt. Yesterday, the pork cutout value fell another 28 cents and movement was light at 265.07 loads. Recent declines have eroded packer profit margins to near breakeven.
- Dollar strength adds to the price pressure.