Corn futures have slightly extended early gains to trade 2 to 5 cents higher, with old-crop contracts leading gains.
- Traders still have Friday's reminder of tight carryover supplies in mind, which is giving old-crop futures a lift.
- And while recent precip in the Midwest has improved soil moisture reserves, this also signals an early start to planting is unlikely.
- The market is also seeing light support from USDA's export sales correction, which noted a bean sale reported last week included sales of 120,000 MT of new-crop corn to China.
- But 1 to 2 cents softer Gulf basis levels for near-term delivery reminds the market of still-lackluster corn demand that could slow further as South American supplies come available. USDA last week trimmed its already low export forecast for 2013-14.
Soybean futures firmed with the open of pit trading, but the market has since softened amid profit-taking to slightly lower trade.
- Old-crop soybeans saw an early boost thanks to ongoing concerns about tight old-crop supplies and export demand strength, but this has given way to profit-taking.
- Shipping delays in Brazil have kept the export window open for the U.S. longer than normal. A 4-cent surge in Gulf basis for immediate delivery and steady to 1 cent higher basis for other months could signal more demand news lies ahead.
- Traders are skeptical about USDA's decision not to raise its export sales forecast for 2013-14.
- Traders have brushed off news USDA issued a daily export sales correction today that its announcement of 345,000 MT in beans sales to China for 2013-14 on March 5 should have been for 225,000 MT of new-crop beans.
- Recent precip in the Corn Belt and above-normal chances for precip in the extended forecast is limiting buying interest in new-crop beans.
- Also, disappointing Chinese economic data is limiting.
Chicago wheat futures are now 1 to 2 cents higher, while Kansas City and Minneapolis wheat are mostly slightly lower.
- Chicago wheat is benefiting from light spillover from corn.
- But rain over the weekend in the Central and Southern Plains is limiting buying interest. While these regions are expected to remain dry through week's end, the 6- to 10-day outlook calls for above-normal precip chances in the Central Plains.
- USDA's Supply & Demand Report update Friday and its higher wheat carryover estimate is also limiting buying interest.
- Traders will watch this morning's export inspection data for signs U.S. wheat is attracting export demand.
Live and feeder cattle futures are off to a mostly firmer start.
- Nearby live cattle contracts are enjoying light short-covering as traders work to bring them in line with last week's cash action at mostly $128.
- While boxed beef prices surged more than $9 for both Choice and Select cuts last week, movement was light, signaling resistance to higher prices. Similarly, boxed beef prices were mixed Friday.
- But the beef price strength did improve packer margins, which could encourage them to boost cash cattle bids this week.
- Nearby feeder cattle are benefiting from light short-covering on ideas the downside has been overdone, but that is the extent of buying interest in light of firmer corn prices.
Lean hog futures are posting moderate losses this morning.
- Lean hog futures saw signs of a technical recovery the latter half of last week. But buying interest has faded to start this week.
- Traders continue to wait for pork demand to improve, as per the seasonal trend. The pork cutout value slid another 75 cents Friday and movement was unimpressive at 53.13 loads.
- This will limit packers' willingness to raise bids, despite positive profit margins. Early cash hog bids are mostly steady as packers are well supplied for near-term needs, minimizing the impact of poor roads in the upper Midwest.
- Also, the April contract is at around a $3 premium to the cash hog index, which is weighing on the lead-month contract.