Corn futures have softened slightly to trade mostly 3 to 6 cents lower, with old-crop contracts leading losses.
- Fresh news is lacking today, leaving traders to square positions ahead of USDA's Thursday reports. Trading volume is light so far today.
- Pre-report expectations will make it tough to get a bullish surprise from USDA in terms of corn plantings. Expectations are for plantings to edge up just 100,000 acres from last year to 97.3 million acres. This is lighter than has been talked about this winter.
- Meanwhile, recent signs of demand improvement are limiting pressure on the corn market. Gulf basis was steady today after firming yesterday.
- The Quarterly Grain Stocks Report is expected to remind the market of tight supplies, with corn stocks seen at 5.03 billion bu. as of March 1, which would be down 993,000 bu. from year-ago.
- If realized, this would be the lowest grain stocks level for this time of the year since 1998.
Soybean futures improved slightly with the open of pit trading to post fractional to 4-cent gains, with old-crop contracts leading to the upside.
- A lack of fresh news is leaving traders to square positions before the release of USDA's acreage and stocks data Thursday.
- Pre-report expectations are for USDA to peg soybean plantings at 78.5 million acres, which would be up 1.3 million acres from 2012 seedings.
- Meanwhile, traders look for soybean stocks as of March 1 to be down around 427 million bu. from year-ago at 947 million bushels.
- Yesterday's signals that the U.S. is still benefiting from decent export demand due to shipping delays in Brazil is supportive.
- A Chinese ag consultant group recently said it expects portside soybean inventories to decline to around 4 MMT by the end of March due to shipping delays in Brazil.
- But softer Gulf basis levels this morning remind traders that a record-large South American crop will eventually hit the market and slow demand for U.S. soybeans notably.
Wheat futures have seen two-sided trade this morning and are currently mixed at all three locations with nearbys favoring the downside and deferred months the upside.
- Chicago wheat futures initially benefited from spread unwinding with corn. But a pickup in corn selling increased selling in wheat futures.
- Sub-freezing temps the past two nights in the Southern and Central Plains could cause some damage to the winter wheat crop. This is especially true in Texas and Oklahoma where much of the crop is jointing. But price action signals traders aren't concerned.
- Otherwise, traders are working to ready positions for USDA's acreage and stocks data Thursday. Traders expect USDA to peg all wheat plantings at 56.4 million acres, up 700,000 acres from last year.
- Meanwhile, the quarterly stocks data is expected to show wheat stocks as of March 1 at 1.167 billion bu., which would be down 32 million bu. from year-ago.
Live and feeder cattle futures are off to a mixed start.
- Traders are dealing with a mixed bag of fundamental data. While Friday's Cattle on Feed Report pointed to tightening supplies and this week's showlist estimate is sharply lower, the boxed beef market has yet to put in a low.
- Yesterday, Choice boxed beef values slipped 85 cents yesterday and Select dropped $2.07. The lower prices did spark improved movement of 172 loads, however.
- Prolonged cold temps have delayed a seasonal uptick in the product market that typically occurs as retailers prepare for the start of the grilling season.
- Last week, cash cattle trade took place at $124 to $125. Tighter showlists are thought to justify at least steady trade this week, and boxed beef action will determine if packers can be enticed to raise prices.
- Weaker corn prices are giving nearby feeder cattle futures a lift.
Lean hog futures gapped higher on the open and are currently slightly higher.
- Lean hog futures are enjoying followthrough buying after the market staged a late reversal and high-range close yesterday.
- The market believes that as temps warm up, consumers will opt to grill more economical pork over beef in light of recent tax hikes and lofty gas prices.
- Yesterday, the pork cutout value rose 68 cents, though movement was very light.
- But in light of the product market's recent struggle to put in a low, buying interest today is largely constrained to corrective short-covering.
- The cash hog market is mixed this morning, reflecting some seller resistance to lower prices. Meanwhile, plentiful market-ready supplies and limited demand have also resulted in some lower bids.
- Outside markets are also mildly favorable, with the stock market and crude oil futures reflecting improved risk appetite and the U.S. dollar index chopping around unchanged.