Corn futures remain mixed with the front-month July contract around 4 cents higher and deferred contracts around 4 to 5 cents lower.
- Bull spreading amid tight supplies is supporting the front-month contract and pressuring new-crop futures today.
- Weekly ethanol production rose to its highest level since June 2012 today, refocusing traders on tight old-crop supplies. Production rose 22,000 barrels per day (bpd) from the week prior to 885,000 bpd. Ethanol stocks rose 400,000 barrels last week to 16.4 million barrels.
- But while supply concerns are lifting old-crop futures, the market appears unconcerned about increasing chances unplanted corn will be claimed as Prevent Plant or switched to other crops.
- Rain is again moving across the Corn Belt, but the market is putting more emphasis on some weather models' call for a drier weather pattern next week.
Soybean futures are up 9 to 16 cents in old-crop futures, down 2 cents in September, and down 9 to 12 cents in new-crop beans.
- Traders are actively bull spreading the soybean market this morning.
- Ongoing corn planting delays signal some of these acres will be shifted to soybeans, pressuring new-crop beans.
- But pressure on new-crop beans is being limited by wet Corn Belt weather that means planting delays for beans could soon become more of a concern.
- Meanwhile, old-crop soybean supplies are very tight and flooding issues on the Mississippi River make these even harder for end-users to come by, lifting old-crop beans. Basis levels at interior locations have risen this week.
- But recent Gulf basis action has weakened. Taiwan bought 124,000 MT of Brazilian soybeans this morning.
Wheat futures are mostly 2 to 4 cents lower at all three locations this morning.
- Spillover from corn is pressuring wheat this morning.
- Ongoing fallout and uncertainty about the finding of GMO wheat in the U.S. remains a weight on the market. Tests have shown no GMO wheat in U.S. exports so far, but today, the Korean Feed Association excluded the U.S. in its 60,000 MT purchase of optional origin wheat. And South Korea will continue to test shipments of U.S. wheat.
- Precip in the Central Plains is pressuring Kansas City wheat futures.
- While precip has largely ended in the Northern Plains, it will be some time until fields dry out enough for spring wheat planting to resume, limiting pressure on Minneapolis wheat.
- Russia's deputy ag minister says it will work to keep 2013-14 grain exports in the 18 MMT to 20 MMT range. It says while it does not plan to add tariffs on exports, it could intervene with purchases for its state reserves. The minister pegs the country's wheat crop between 54 MMT and 55 MMT.
Live cattle are solidly lower this morning, while feeder cattle are posting slight losses.
- Expectations for steady to lower cash cattle trade are building amid continued softening of boxed beef prices.
- Choice boxed beef cuts fell 88 cents yesterday and Select fell $1.35, but movement did pick up to 224 loads. Choice cuts have fallen six of the past seven days, while Select cuts fell nine of the past 10 days.
- Packers appear to be well supplied on near-term needs, lessening urgency to secure supplies. Initial bids are reportedly at $121, which compares to asking prices of $126. The wide spread signals late-week trade is likely.
- But futures are already well below last week's cash cattle trade at mostly $124, limiting pressure to profit-taking after yesterday's firmer close.
- Feeder cattle futures are also seeing some profit-taking after yesterday's gains, but weakness in the corn market is limiting selling interest.
Lean hog futures are posting slight losses this morning.
- Lean hog futures are seeing some profit-taking today as the market has extended gains this week.
- But cold, rainy weather raises demand concerns as this is less-than-ideal for grilling weather. The pork cutout value did improve 34 cents and movement rose to 411.2 loads yesterday, however.
- This lifted packer profit margins, though they remain in the red.
- The cash hog market is mostly steady today thanks to tightening market-ready supplies.
- Average hog weights in southern Minnesota and Iowa did rise 1.3 lbs. last week, however.
- Pressure also stems from the slight premium the front-month holds to the cash hog index.
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