Corn futures are around a nickel higher in the front-month, while new-crop futures are mostly 3 to 4 cents lower.
- Traders are engaging in some bull spreading ahead of the weekend.
- A 3-cent rise in Gulf basis for delivery this month after gains for summer-month delivery yesterday signals tight supplies and possibly improved export demand, which is lifting the front-month.
- But the rest of the market is under pressure as traders view recent and expected Midwest rains as a positive (in contrast to farmers and end-users) and they are not overly concerned about acres that did not get planted.
- Spillover pressure from soybeans is also making it tough for new-crop futures to find buying interest.
Soybean futures are also seeing some bull spreading with old-crop futures slightly lower and new-crop contracts roughly 9 to 10 cents lower.
- Bull spreading is being encouraged by tight old-crop supplies and expectations for a rebound in 2013 soybean production.
- Traders continue to view recent and forecast rains as a positive for yields.
- While rains did likely cause some producers to switch intended corn acres to soybeans, there are also concerns about getting the bean crop planted in the Upper Midwest, and there are development concerns for acres that have been seeded.
- Heavy rains are expected to return to the western Corn Belt today, and more rain is in the forecast next week.
- Meanwhile, Gulf soybean basis firmed 2 to 7 cents for June and July delivery, pointing to tight carryover supplies and the possibility the price break has spurred export demand.
Wheat futures are mostly 8 to 10 cents lower in Chicago and Kansas City, while Minneapolis wheat is 2 to 6 cents lower.
- Harvest-related hedge pressure is weighing on the Chicago and Kansas City wheat markets. This is overshadowing concerns about the poor state of the HRW crop.
- Also, USDA confirmed expectations for plentiful global wheat supplies Wednesday, which is limiting concerns about the impact of any winter wheat crop shortfall.
- Meanwhile, wheat export demand remains limited as trade partners await USDA's issue of a "rapid test" kit to detect GMO material.
- Traders in the Minneapolis wheat market are reducing risk ahead of the weekend and Monday's update on spring wheat planting progress.
Live cattle futures are under light pressure to start the session, while feeder cattle futures are mostly moderately lower.
- Live cattle traders are reducing risk as they wait for active cash cattle trade to develop. Light sales were reported at $122.50 to $126.50 in Iowa yesterday -- steady to firmer compared to last week's action in the state -- but the standoff continues at other locations.
- Falling Choice boxed beef values and slightly heavier showlist estimates has most expecting steady to lower trade compared with last week's $122 trade on the Southern Plains. But nearby futures are already $2.50 or more below these prices, limiting selling interest.
- While Choice boxed beef prices have fallen this week, they remain above the $200-per-cwt. mark. Generally speaking, movement has been strong at these historically high levels.
- Traders are again working to narrow the steep premium feeder cattle futures hold to the cash index.
June lean hogs again gapped higher on the open and are moderately higher. Deferred months are posting slight to moderate losses after gapping lower on the open.
- Technical buying is again supporting June lean hogs ahead of the contract's noon CT expiration today. But the market's $2-plus premium to the cash hog index signals a reversal is likely.
- Traders in other contracts are taking advantage of the hog market's impressive rally ahead of the weekend.
- The soon-to-be-front-month July contract is at nearly a $2 discount to the index, limiting selling interest.
- Supplies of market-ready hogs continue to tighten and some packers are in need of supplies for this weekend's kill. Thus, cash hog bids today are again steady to higher, despite the fact that packers are cutting in the red.
- The pork cutout value firmed 43 cents yesterday, but movement was relatively light.