Corn futures have trimmed early losses, but are still 5 to 9 cents lower with new-crop futures leading to the downside.
- Corn futures are facing technical selling pressure as the front-month contract closed below the 50-day moving average yesterday after spending the prior two days above that level. This is encouraging funds to lighten their long exposure.
- Also, improved weather the last 48 hours has allowed farmers to get in the field to plant corn.
- However, wintry weather is moving into the upper Midwest and widespread rains are expected across the remainder of the Belt the rest of the week. Expected precip amounts, while still seen as significant, have been reined in, too.
- But a 1-cent rise in Gulf basis for June delivery reminds of tight old-crop supplies.
- Also, ethanol output last week rose 4,000 barrels per day (bpd) from the week prior to 857,000 bpd. Ethanol stocks fell by 600,000 barrels last week to 17.0 million barrels.
Soybean futures are 30-plus cents lower in the May and July contracts. The rest of the market is posting losses in the teens to 20s.
- Soybean futures are being pressured by expectations corn planting delays will translate to increased bean seedings.
- Funds are also on the short side of the market, which is weighing heavily on nearby futures. Plus, there is a broad attitude of risk aversion today.
- Gulf basis slid 10 cents for May delivery this morning, signaling increased farmer selling.
- Weak Chinese manufacturing data this morning adds to ideas the country's feed demand will slow due to economic headwinds made even greater by the bird flu situation there.
Wheat futures are double-digit lower in Chicago while Kansas City is 6 to 10 cents lower and Minneapolis wheat is 4 to 9 cents lower.
- Spillover from corn and soybeans is weighing heavily on the wheat market today. This is encouraging profit-taking.
- The first day of the Wheat Quality Council's HRW wheat tour found yield potential in central and northern Kansas and far southern Nebraska below last year and the five-year average. Scouts are taking samples from western and southern Kansas today -- where crops suffered greater drought and freeze damage.
- Plus, freeze warnings are in effect for the Southern and Central Plains today and tomorrow.
- And another wintry blast is moving across the Northern Plains today, dumping snow on the already-saturated region, further delaying spring wheat planting.
Live cattle futures are enjoying slight to moderate gains in 2013 contracts this morning. Feeder cattle futures are also enjoying slight gains.
- Live cattle futures are benefiting from growing expectations for firmer cash trade compared to action at mostly $128 in the Southern Plains last week and trade at $128 to $130 in Nebraska. Packers have established bids at $125 to $127.
- Tighter showlist estimates along with improvement in the boxed beef market are seen as giving feedlots an edge in this week's negotiations. Packer profit margins have improved this week, though they remain in the red.
- Yesterday, Choice boxed beef values rose $1.60 and Select surged $1.82. Movement also improved to 160 loads, though this tally is still far from impressive.
- Concerns linger that historically high prices could limit consumer demand during these weak economic times.
- Weakness in the corn market today is encouraging some short-covering in feeder cattle.
Lean hog futures are off to a mixed start with the May contract slightly higher and the rest of the market posting slight losses.
- The May lean hog contract is being supported by another day of strength in the cash hog market, as supplies are tightening while demand is rising.
- But the rest of the market is being pressured by profit-taking after a pullback in the pork market's recent strong rally yesterday. The pork cutout value fell $1.64 yesterday.
- Recent higher cash prices outpacing gains in the pork market have pulled some packer profit margins into the red.
- Buying interest is also being limited by the steep premium nearby futures hold to the cash hog index and broad risk aversion in the commodity sector today.