Corn futures have improved from a choppy start to the day session to post gains of 7 to 10 cents in old-crop futures, while new-crop is around 4 cents higher.
- Traders are building some more weather premium into prices as the upper Midwest is seeing heavy rain and snow that will further push back the planting date and will likely result in some acres being switched to soybeans or other crops.
- This stirs concerns about tight old-crop supplies.
- Also, this morning's Weekly Export Sales of 329,300 MT for 2012-13 and 656,000 MT for 2013-14 were impressive and came in near the upper end of expectations. China was the lead buyer of new-crop corn.
- Steady to 1 cent higher Gulf corn basis this morning for spring and summer delivery signals demand may be improving from lackluster levels.
- The national average corn basis firmed 23 3/4 over the past week to a lofty 42 1/4 cents over July futures, also signaling tight supplies.
Soybean futures are mixed amid bull spreading. Old-crop futures are 1 to 7 cents higher while new-crop is fractionally to 1 cent lower.
- Old-crop soybean futures are benefiting from corrective short-covering after the steep selloff yesterday on talk of soybean imports into the Southeastern U.S.
- New-crop contracts are being mildly pressured by expectations that soybean acreage will come in higher than March intentions.
- The Weekly Export Sales Report showed net sales reductions of 109,800 MT for 2012-13 but sales in excess of 1.341 MMT for 2013-14. This signals some switching of old-crop bean orders to new-crop.
- Adding to the still-strong demand picture is USDA's announcement of a daily new-crop soybean sale to China for 290,000 MT today.
- Gulf soybean basis firmed 5 cents for immediate delivery this morning, signaling more export demand news may lie ahead.
Wheat futures are roughly 4 to 6 cents higher in Chicago, mixed with an upside bias in Kansas City and mostly 8 to 10 cents higher in Minneapolis.
- Minneapolis wheat is the upside leader today thanks to a winter storm event in the Northern Plains overnight that will further delay already slow spring wheat planting.
- Other locations are benefiting from day two results of the Wheat Quality Council's HRW wheat tour through western and southern Kansas and far northern Oklahoma. Scouts pegged the average yield for the area at 37.1 bu. per acre, compared to 43.7 bu. per acre last year and 39.5 bu. per acre for the five-year average.
- Support also comes from a reminder of recently improved wheat demand. Weekly wheat export sales of 219,200 MT for 2012-13 and 497,300 MT for 2013-14 topped expectations by a wide margin.
- Strength in the U.S. dollar index is keeping bullish enthusiasm in check.
Live cattle futures gapped higher on the open and are enjoying slight to moderate gains in most contracts. Feeder cattle futures are also moderately higher.
- Live cattle futures are enjoying buying interest thanks to a $3.10 surge in Choice boxed beef values yesterday to $199.49 -- just $1.69 short of the all-time high that was posted in October 2003. Select values also surged $1.79 and movement was decent at 173 loads considering a 10-year high in premium beef cuts.
- Moderate cash cattle trade took place at $128 to $129 in Kansas and Texas and at $130 to $131 in Nebraska (a record high) and Colorado yesterday, which was steady to slightly higher compared with last week.
- But considering near-record beef prices, some held out in hopes of even higher prices.
- Packers have seen profit margins improve to near breakeven thanks to the boxed beef market surge.
- Buying interest is being tempered by marked strength in the U.S. dollar index today.
Lean hog futures are off to a narrowly mixed start with nearby contracts favoring the upside.
- The pork cutout value got back 67 cents of Tuesday's losses yesterday and movement surged to 522.1 loads. This is encouraging light short-covering in lean hog futures as it points to strong grilling season demand.
- The cash hog market is steady to higher again today. Supplies are tightening seasonally and the winter storm event has disrupted travel in southern Minnesota and northern Iowa.
- But on the other hand, recent cash market strength has pulled cutting margins into the red and some plants have trimmed their kill schedules due to the storm.
- Weekly pork export sales of 8,000 MT were down 4,200 MT from the week prior.
- The front-month contract remains at roughly a $6.70 premium to the cash hog index, which along with dollar strength is limiting buying interest.