March through May 2013 corn futures are mildly favoring the upside and far-deferred contracts are steady to slightly weaker.
- Traders remain focused on evening positions ahead of USDA's key reports to be released on Friday morning. Traders are skittish about adding new positions on either side of the market given the fear the reports could trigger a strong price reaction -- in either direction.
- The U.S. dollar index has extended gains, which is limiting buying interest in corn.
- Buying is also being capped by prospects for a larger corn crop in Brazil, as the country's supply estimating arm, Conab, modestly raised its crop forecast to 72.19 MMT and sees corn exports at 21.5 MMT.
- Gulf corn basis is 1 to 5 cents lower this morning to reflect demand destruction.
Soybean futures are narrowly mixed as the start of pit trading slowed buying interest.
- Traders continue to take a cautious approach toward the market ahead of Friday's key USDA reports. Pre-report positioning is leading to mild short-covering in some contracts, but buying interest is limited.
- Record crop potential in Brazil is also limiting buying interest. Conab raised its estimate of the crop to a record 82.7 MMT. Traders anticipate Brazilian soybean supplies will be in exportable position by February.
- This week's forecast is mostly favorable in Brazil, with some of the drier areas expected to get precip.
- USDA announced an optional-origin soybean sale of 120,000 MT to China for 2013-14. Because the sale was optional origin and for the next marketing year, there's been very little price reaction to the news.
- Gulf soybean basis is steady to 5 cents lower for nearby delivery this morning, which reflects the recent slowdown in demand.
Wheat futures are now favoring a weaker tone at all three exchanges.
- An extension of strength in the U.S. dollar index is weighing mildly on wheat futures.
- Traders are also focused on evening positions ahead of USDA's winter wheat seedings report. Winter wheat seedings could come in stronger than anticipated, as guaranteed crop insurance prices likely attracted some acres.
- Rains moving across Texas this morning are also weighing on the market, although lighter amounts are being noted in Kansas and Oklahoma.
- Gulf wheat basis is 2 to 5 cents lower for nearby delivery, suggesting a softening of demand.
Live cattle futures are weaker, with feeder cattle mixed to mostly lower.
- Light profit-taking is weighing on deferred futures. Selling interest in the lead-month contract is limited by the tight supply situation, although the he $4-plus premium February contracts hold to the cash market is limiting buying interest.
- Very light cash cattle trade was report at $128 in Texas yesterday, although traders don't sense this was a true test for the week. Feedlots are still seeking $130 or more for this week's supplies.
- Showlist numbers are up from last week in the Plains, which could keep packers from raising cash bids as cutting margins are in the red. But the boxed beef market remains strong enough to limit selling pressure.
- Feeder cattle futures are mixed with a slight downside bias as live cattle are favoring the upside and corn is mildly firmer in most contracts.
Lean hog futures are under moderate to heavy pressure.
- The premium futures hold to the cash market is weighing on lean hog futures this morning as the cash hog market has started to soften.
- Cash hog bids are steady to $1 lower across the Midwest. Bids are mostly steady west of the Mississippi River, while eastern plants are reporting some softer bids.
- Adding to the price pressure is technical-based selling as futures continue to flash signals a market top is in place.