Corn futures have firmed to trade mostly 3 to 6 cents higher.
- USDA yesterday confirmed the continued slow pace of planting and crop emergence. Some of the remaining 4.87 million unplanted acres (including significant amounts in major corn producing states) will be switched to soybeans or claimed as prevent plant.
- This along with deterioration of the U.S. corn crop is enough to encourage light short-covering today, but it is not enough to support active buying.
- Pro Farmer's weighted Crop Condition Index dropped eight points last week, largely due to an eight-point decline in the condition of the No. 1 producing state of Iowa's corn crop.
- Traders are mostly focused on readying for USDA's reports Wednesday. They expect USDA to trim old-crop carryover by 11 million bu. to 748 million bushels. Traders also expect USDA to cut 246 million bu. from its new-crop carryover projection to 1.758 million bushels.
- Gulf basis is steady to 2 cents lower for June and July delivery this morning, signaling export demand remains light.
Soybean futures have firmed amid some bull spreading this morning. Old-crop futures are now double-digit higher, while new-crop futures are narrowly mixed.
- Tight old-crop supplies and continued expectations for a rebound in the 2013-14 crop are encouraging bull spreading.
- Limiting buying interest in new-crop contracts is news Oil World expects an 18% increase in 2013-14 world soybean production to 284 MMT. It expects U.S. production to rebound to 92 MMT.
- On the other hand, Oil World expects Chinese soybean production to fall by 0.7 MMT to 11.8 MMT in 2013-14. This is favorable for U.S. soy export prospects.
- Traders are not yet overly concerned about slow soybean planting and emergence.
- Yesterday's crop progress report showed soybean planting 71% complete as of Sunday, which is below the five-year average of 84%. Emergence was pegged at 48%, which compares to 67% on average.
- Warmer temps this week should help with emergence, but rain in the forecast will continue to delay planting.
- Traders are also readying for USDA's reports tomorrow. The market expects little change to USDA's old-crop carryover estimate, but traders expect USDA to raise new-crop carryover by around 8 million bu. from last month.
Wheat futures are are favoring the upside this morning, with most contracts at all three locations enjoying gains around 3 to 7 cents.
- Gains in the corn market and a weaker U.S. dollar index are giving bulls an edge in the wheat market today.
- Traders are not overly concerned about the stressful heat wave hitting the Plains as harvest is picking up in some locations.
- Minneapolis wheat continues to benefit from concerns about slow spring wheat planting. North Dakota is just 77% planted, compared to 94% on average. Nationally, 87% of the crop is seeded compared to 96% on average.
- Spring wheat emergence also remains well behind the norm at 71% emerged versus 89% on average.
- Traders anticipate just small adjustment to USDA's old- and new-crop wheat balance sheets on Wednesday.
- Japan continues to restrict U.S. western white wheat imports as it awaits the conclusion of the U.S. GMO wheat investigation. This remains a limiting factor.
Live cattle futures are posting slight to strong gains in early trade. Feeder cattle futures mixed with nearbys favoring the upside.
- Cattle futures are enjoying some corrective short-covering today as traders view the downside as overdone and futures are $2-plus below last week's disappointing cash cattle trade at $122 in the Southern Plains.
- Prospects for firmer trade this week are less than favorable as trade last week was relatively light and feedlots carried over supplies. Showlist estimates this week are up slightly.
- But the boxed beef market did get off to a relatively strong start yesterday. Choice cuts firmed $1.59 and Select firmed 7 cents. Movement was also decent at 188 loads.
- If the beef market continues to improve despite lofty prices, this could improve the cash trade outlook.
- Feeder cattle futures are mixed as traders weigh spillover from live cattle and weakness in the corn market against the sharp premium the market holds to the cash index.
Lean hog futures posted another upside gap on the open today and are enjoying moderate to sharp gains with nearby contracts leading to the move higher.
- Lean hog futures are enjoying strong followthrough buying today. Rumors China was buying U.S. pork gave the market a big boost yesterday and it is spurring strong buying again today.
- The improved technical posture of the market is also encouraging chart-based buying. June lean hogs gapped above the $100.00 mark today, while July futures are hovering slightly below that mark.
- But the market is highly oversold according to the 9- and 14-day Relative Strength Index. This could signal a top is near.
- Meanwhile, tightening market-ready supplies and packers' needs of supplies for late-week kills are keeping the cash hog market steady to higher, despite negative profit margins.
- Some packers have trimmed kill hours in an effort to lift margins. As a result, this week's slaughter is expected to be the lightest non-holiday kill since July 2012.
- The pork market also improved yesterday. The pork cutout value firmed $1.96, though movement failed to impress at 277.6 loads.