Corn futures have rallied to trade double-digit higher in old-crop contracts with May and July up 20-plus cents. New-crop is 8 to 9 cents higher.
- With USDA report data factored into prices, the market has shifted its attention back to the 2013 growing season.
- Traders expect this afternoon's Crop Progress Report to reflect the biggest planting advance thus far this year, but for the pace to remain well behind average. There is a lot of uncertainty about how much progress was made and will be made this week.
- The forecast is expected to remain dry in the Corn Belt until Thursday, when rains move back into the region. And there are above-normal precip chances for the Belt next week.
- Meanwhile, new-crop uncertainty adds to concerns about tight old-crop supplies.
- State-run China National Grain and Oils Information Center pegs China's corn crop at a record 214 MMT, but it sees imports up 85.2% to 5 MMT in 2013-14.
- Gulf basis was a mixed bag this morning, with basis falling 6 cents for immediate delivery, but rising 1 to 5 cents for July and August delivery.
Soybean futures are off to a firmer-than-expected start with old-crop up 5 to 18 cents and new-crop around 5 to 6 cents higher.
- Old-crop futures are benefiting from short-covering on USDA's reminder Friday that old-crop supplies are very tight. This is encouraging bull spreading.
- Buying interest in new-crop futures is being limited by USDA's forecast for a record soybean crop and a rebound in 2013-14 carryover.
- Buying enthusiasm is also being limited as disappointing Chinese economic data raises concerns about the country's economic recovery.
- Gulf basis fell 2 to 3 cents for May delivery this morning.
Wheat futures are mostly 8 to 13 cents higher in Chicago, double-digit higher in Kansas City and 5 to 11 cents higher in Minneapolis.
- Wheat futures are following corn higher this morning. Early gains triggered buy stops.
- The market will receive another reminder of the poor state of the winter wheat crop and slow spring wheat planting.
- The forecast for above-normal temps and limited rainfall in drought-stricken HRW country is also encouraging traders to build some weather premium into prices.
Live cattle futures gapped higher on the open and are enjoying slight gains. Feeder cattle futures are mostly moderately higher.
- Cattle futures are enjoying some corrective short-covering this morning as traders view the downside as overdone in light of near-record Choice boxed beef values.
- Plus, futures are still at nearly a $5 discount to last week's cash trade at mostly $126. This signals the market is concerned high beef prices are not sustainable, especially with Memorial Day retail buying winding down.
- Traders will closely monitor boxed beef prices and movement as well as showlist estimates before forming cash cattle opinions this week.
- Light support also stems from news the U.S. is reportedly working on a protocol with Russia to ensure shipments of U.S. beef are ractopamine-free, though resolution of the issue will likely take several months.
- Feeder cattle futures are also enjoying corrective short-covering, with buying being tempered by strength in the corn market.
Lean hog futures are off to a lightly traded, choppy start.
- May lean hog futures are facing light pressure as traders work to narrow the slight premium the contract holds to the cash hog index ahead of its expiration Tuesday.
- Both buying and selling interest in deferred lean hog contracts is light this morning as traders are uncertain as to near-term direction.
- Packer profit margins improved on Friday, which could make packers more willing to pay up for tightening supplies. Cash hog bids are mostly steady this morning.
- The pork cutout value firmed 92 cents Friday, but movement was relatively light at 327.5 loads. Traders will closely watch movement for signs as to whether retailers will feature pork following Memorial Day.
- News USDA is working on a protocol to ensure Russia U.S. shipments are ractopamine-free is also providing light support.