Corn futures have seen choppy action this morning. Old-crop futures are currently slightly higher and new-crop contracts are narrowly mixed.
- This morning's better-than-expected weekly export sales of 282,300 MT for 2012-13 and 371,000 MT for 2013-14 is mildly supportive.
- The May contract is also benefiting from its bounce back above its 50-day Moving Average after testing that level in the overnight session.
- Countering this, however, is the fact that the pace of exports remains well below year-ago as well as a slide in Gulf basis levels this morning.
- Also, China bought 13,700 MT of corn from India. While the total was light, this is the first time in decades such a sale has taken place. This emphasizes how end-users are seeking alternatives to U.S. corn.
- Recent soil moisture improvements across the Corn Belt and more precip in the forecast are limiting buying interest in new-crop futures. This week's drought monitor reflects further Midwest drought improvement, although it notes frozen soils limited deep soil moisture penetration.
- Strategie Grains raised its corn production estimate for the European Union by 0.4 MMT to 64.1 MMT.
Soybean futures softened with the open of pit trading to post losses of mostly 6 to 19 cents in old-crop contracts, while new-crop beans are 3 to 8 cents lower.
- Soybean futures are seeing followthrough selling today on ideas South American supplies are slowly causing countries to scale back their U.S. bean purchases.
- It has been some time since a daily bean sale announcement. And steady to lower Gulf basis levels signal that is unlikely to change soon.
- And while this morning's weekly export sales of 657,700 MT for 2012-13 and 126,000 MT for 2013-14 met expectations, they are not sparking buying interest.
- Plus, improvement in the Midwest drought adds to ideas production will rebound this year.
Wheat futures firmed with the open of pit trading to trade roughly 5 to 9 cents higher in Chicago and Kansas City, while Minneapolis is 2 to 4 cents higher.
- Wheat futures are being supported by proof U.S. wheat prices are competitive. Weekly export sales of 888,500 MT for 2012-13 and 198,500 MT for 2013-14 topped expectations by a wide margin.
- Light support also comes from news Strategie Grains cut its 2013 wheat production forecast for the European Union by 0.6 MMT to 131.6 MMT.
- And while this week's drought monitor reflects slight improvement across the Central and Southern Plains, a large drought footprint remains in place. Abnormally warm temps in the Central and Southern Plains adds to dryness concerns.
- After recently expanding its wheat export limit to 5 MMT for private companies, India's food minister says the country is again considering further expanding its wheat export quota on a government-to-government basis due to large stockpiles.
Live cattle futures are off to a choppy start. Feeder cattle futures are lower.
- Traders are engaging in some light profit-taking as they wait for cash cattle trade to begin.
- Cash trade is expected to take place at steady to higher prices compared with $128 trade last week. But as bids and asking prices are wide, trade may not get started until tomorrow. Plus, nearby futures are already at a slight premium to last week's trade.
- Boxed beef price strength this week is seen as giving feedlots an edge in negotiations. Yesterday, Choice values rose another 21 cents and Select cuts firmed 30 cents to another record high. Movement also improved slightly from recent days to 159 loads, though the total is still light relative to recent weeks.
- Selling interest is also being limited by this morning's Weekly Export Sales Report that showed a marketing-year high of 31,500 MT in beef sales, thanks in large part to 16,700 MT purchased by Japan.
- Traders are booking profits in feeder cattle futures after the market posted gains yesterday.
Lean hog futures got off to a narrowly mixed start, but futures are now slightly lower.
- Most packers are well supplied for the reminder of this week and low profit-margins are making them cautious bidders for next week's needs. Plus, supplies are easy to come by.
- The pork cutout value rose 8 cents yesterday and movement was decent at 66.75 loads.
- But the pork market has struggled to string together consecutive days of gains. Thus, traders are skeptical as to whether a seasonal uptick is in the works.
- The fact that nearby futures are at a $3-plus premium to the cash hog index is adding light pressure.