Corn futures have firmed to post gains around 1 to 2 cents in most contracts.
- Pressure on the corn market overnight has given way to fresh buying as traders recognize demand for U.S. corn remains strong.
- And while political tensions in Ukraine have eased for the time being, the possibility of slowed grain exports from the country remains an underlying source of support as the situation could heat up again.
- Today Ukraine's ag ministry said the country's grain exports will likely total 8.7 MMT the remaining four months of the 2013-14 marketing year. Since July 1, the ministry says Ukraine's grain exports totaled 24.7 MMT, which compares to 18.1 MMT during this period last year.
- The market is also enjoying spillover from soybeans.
- Gulf corn basis slipped 3 cents for immediate delivery this morning.
Old-crop soybeans have extended early gains to trade double-digit higher; new crop is roughly 4 to 6 cents higher.
- Fresh buying is being seen in the soybean market today following yesterday's wide price swings.
- Some private crop watchers continue to cut their Brazilian crop estimates. One of those is Pro Farmer South American consultant Dr. Michael Cordonnier, who has now cut his Brazilian crop estimate four weeks in a row.
- And ongoing shipping delays in Brazil have kept the U.S. soybean export window open longer than traders' anticipated.
- Gulf soybean basis is steady this morning.
SRW and HRW wheat futures are narrowly mixed while HRS wheat is mostly 5 to 9 cents higher.
- State condition reports point to ongoing deterioration with the HRW wheat crop in Kansas, Oklahoma and Texas. But countering this is the forecast for much-needed precip in the region this week.
- Ongoing concerns about the potential slowdown in trade from the Black Sea region, which is a major global hub for wheat trade, remains a source of underlying support.
- Gulf basis firmed a penny for SRW wheat this morning, but slipped 2 to 5 cents for deferred delivery. HRW wheat basis held steady.
Live and feeder cattle futures are posting slight to moderate gains this morning. June and August live cattle gapped higher on the open.
- Cash fundamentals to start the week favor market bulls, which is giving cattle futures a lift to start the week.
- The boxed beef market continued its surge yesterday. Choice boxed beef values surged $3.79 yesterday and Select soared $4.69 with both cuts nearing the $230.00 per cwt. level. Also of note, movement improved to 145 loads.
- Also favorable are slightly tighter showlist estimates in Colorado, Kansas and Texas and steady numbers in Nebraska.
- However, packers are still dealing with deeply negative cutting margins, which may make them resist to paying steady or higher cash prices relative to last week's record-setting trade.
- Slight weakness in the corn market should limit pressure on feeder cattle futures to corrective selling.
Lean hog futures are a mixed bag today, with nearby contracts sharply higher and far-deferred months facing pressure.
- Lean hog futures are seeing some bull spreading this morning. The front-month contract has set yet another all-time high. Buy stops were triggered on its move through $110.00 and 111.00.
- The pork cutout value rose $1.03 yesterday, but movement slowed to 220.43 loads.
- Ongoing concerns about the impact of porcine epidemic diarrhea virus (PEDV) remains a supportive factor.
- Traders are brushing off news Russia said more guarantees will be needed before it will lift its U.S. pork import ban. The country had previously indicated it would lift the ban March 10. Political tensions are likely behind this shift.
- Traders are not overly concerned about narrowing the wide premium the front-month contract holds to the cash hog index. The index continues to rise and much time remains before the contract's expiration. Plus, packer profit-margins remain in the black.
- Packers are again paying steady to higher prices for cash hogs as frigid temps are limiting supplies.
- While technicals remain in bulls' favor, it's also important to note that increased price volatility at high prices can be a sign the market is in the process of putting in a high.
- The front-month contract remains severely overbought.