Corn futures are posting losses of 4 to 7 cents this morning.
- Heavy rain fell across Iowa again last night and more rain is in the forecast for the Midwest this week. Recent major precip has led to major reductions in the Midwest drought footprint, but it also means planted corn acreage will very likely fall short of USDA's 97.3-million-acre estimate in March.
- However, market action today signals traders are taking a step back to reevaluate what planting delays and the need for replanting means for 2013 production prospects.
- A 7- to 10-cent surge in Gulf basis for August delivery signals some increasing concerns about new-crop supplies easing the shortfall of the 2012 growing season. Basis firmed 2 cents for immediate delivery, too, signaling some export demand news may lie ahead.
- A downward revision to U.S. first quarter GDP and a rise in new jobless claims last week are pressuring the U.S. dollar index today. This is limiting pressure on corn.
Soybean futures are posting losses of 6 to 9 cents in old-crop contracts, while other contracts are mostly 4 to 8 cents lower.
- Traders are booking some profits today after the market's relatively lackluster finish yesterday.
- The likelihood soybeans will pick up some intended corn acres is also getting some attention today. There is uncertainty about how many acres this will entail, however.
- Somewhat offsetting this is a very slow start to soybean planting and emergence. Very little progress is expected this week as the Midwest has been hit by multiple torrential rains and more are in the forecast.
- Selling is also being limited by news China bought 120,000 MT of soybeans for 2013-14 delivery. A 4- to 5-cent jump in Gulf basis this morning signals more such demand news may lie ahead.
Wheat futures are mostly 5 to 8 cents lower in Chicago and Kansas City, while Minneapolis is seeing slightly lighter losses.
- Losses in the corn market are setting the tone for wheat futures today.
- Also, fallout from the discovery of unapproved GMO wheat in Oregon is weighing on the market. Japan canceled its offer to buy U.S. western white wheat in its weekly tender and says it will halt purchases of such wheat until the U.S. provides a testing kit for shipments. The European Union will also test U.S. wheat shipments for GMO content, while other key trading partners are going to closely monitor the situation.
- Gulf basis slid 2 to 7 cents for May through September delivery this morning, also speaking to reactionary slowed exports.
- Selling interest in Minneapolis wheat futures is being limited by heavy rains pushing through the Northern Plains, which are further delaying spring wheat planting.
Live cattle futures are posting slight losses this morning, while feeder cattle futures are slightly higher.
- The boxed beef market is off to a strong start this week, signaling consumers have responded well to lofty beef prices. Yesterday, Choice boxed beef values firmed 99 cents and Select was up 40 cents and movement was impressive at 231 loads.
- But traders are taking advantage of yesterday's gains by booking some profits as some are still not convinced near record-high prices for premium beef cuts are sustainable. Weak U.S. jobs and GDP data today add to such ideas.
- Cash cattle trade has yet to get underway. Showlist estimates are up this week and futures are still well below last week's cash prices. On the other hand, packers are enjoying wide margins and the boxed beef market has delivered a strong performance this week.
- Weakness in the corn market and followthrough buying are supporting feeder cattle futures. Heavy pressure on the U.S. dollar index is also supportive.
Lean hog futures are moderately higher this morning.
- Pork market performance yesterday was impressive; the pork cutout value firmed 76 cents and movement surged to 547.8 loads.
- The lean hog market also continues to benefit from expectations the purchase of Smithfield Foods by China's Shuanghui International will boost U.S. pork exports.
- A sharply lower U.S. dollar index is also favorable for export demand.
- Meanwhile, packers are paying mostly steady bids as they work to secure supplies for this weekend's kill and early next week. While their margins are near breakeven, supplies are tightening seasonally.