Corn futures have improved to post slight gains in nearby contracts, while deferred months are mixed.
- Old-crop corn futures are benefiting from light short-covering amid ideas the downside was overdone yesterday. Dollar weakness is encouraging to that end.
- But that is the extent of buying interest as the Weekly Export Sales Report was disappointing. A net sales reductions of 49,800 MT for 2012-13 cut into an already lackluster 2013-14 export sales tally of 206,500 MT.
- Also pointing to softening export demand, Gulf corn basis softened 3 cents for March and 4 cents for June delivery.
- Traders are also reducing risk exposure ahead of USDA's Supply & Demand Report tomorrow, which is expected to reflect a slight increase in carryover due to softer export and domestic demand.
Soybean futures have seen two-sided trade this morning. The March contract is slightly higher, but the rest of the market is down 2 to 7 cents.
- Weakness in the U.S. dollar index and an impressive showing in the weekly export sales report has given old-crop beans a lift at times this morning. Export sales of 392,000 MT for 2012-13 and 990,600 MT for 2013-14 topped expectations.
- Meanwhile, Gulf basis surged 12 cents for immediate shipment and was 2 and 1 cent higher for April and May delivery, respectively, this morning. But this is countered by sharply lower Mississippi River bids today.
- But strong export demand is known and traders are more focused on reducing risk ahead of USDA's balance sheet adjustment tomorrow.
- Demand for soy products slowed last week. A soyoil net sales reduction of 19,700 MT and soymeal sales of 119,300 MT fell well short of expectations.
- Brazil's Conab cut its soybean production forecast by 1.2 MMT from last month to 82.1 MMT. This still represents a record-large bean crop, however.
- Brazil shipping delays have resulted in still solid export demand for beans, but traders are concerned that this window will soon close.
Wheat futures are roughly 3 to 6 cents higher in Chicago and Kansas City this morning, while Minneapolis wheat is up 5 to 7 cents.
- Dollar strength is encouraging corrective short-covering in the wheat market today.
- Plus, this morning's weekly export sales report showed sales of 618,100 MT for 2012-13 and 210,000 MT for 2013-14, topping expectations by a wide margin and signaling U.S. wheat prices are competitive globally.
- Countering this, however is news that India did approve an additional 5 MMT of wheat for export, as expected. This is in addition to the 4.5 MMT already approved for export.
- Chicago wheat is also benefiting from efforts to correct the wheat-corn spread after the market learned that an Indiana ethanol plant was bidding for SRW wheat due to tight corn supplies.
- This morning's drought monitor reflected minor improvement across Kansas and Oklahoma and a slight expansion of the most extreme drought in Texas.
- Plus, the National Weather Service has scaled back its precip forecast in both its 5-day and its 8- to 14-day forecasts for the Southern and Central Plains.
Live cattle futures are off to a narrowly mixed start. Feeder cattle futures are favoring the upside in choppy trade.
- Dollar strength and ideas the downside was overdone is encouraging some light short-covering in live and feeder cattle futures.
- Sharp pressure on live cattle futures yesterday led to the start of light cash cattle trade yesterday at $128 -- steady with the week prior. But a number of feedlots held out for higher cash prices they feel are justified by this week's surge in boxed beef prices.
- Yesterday, Choice boxed beef values rose $2.21 and Select cuts surged $3.28, though movement was again relatively light at 142 loads.
- Beef strength has helped pull packer profit margins into the black for the first time in six months, which could increase their willingness to pay up for cash cattle.
- Also, weekly boxed beef sales of 15,400 MT for the week ended Feb. 28 were a vast improvement over sales of 3,900 MT the week prior.
- Choppy action in the corn market is limiting gains in feeder cattle futures.
Lean hog futures gapped higher on the open and most contracts are enjoying sharp gains this morning.
- Lean hog futures are benefiting from short-covering as the market is technically oversold. Dollar weakness is also encouraging of this.
- But that will be the extent of buying interest for the time being as the pork market has yet to put in a low, contrary to the seasonal trend.
- Yesterday, the pork cutout value fell 47 cents, though movement was strong at 81.38 loads. Recent declines have pulled some packer profit margins back into the red.
- Nevertheless, cash hog bids are mostly steady today as some packers are ramping up production schedules and some are buying additional loads for next week.
- The fact that traders are extending the premium April lean hogs hold to the cash hog index signals they expect Easter ham buying to soon give the cash market a lift.