Corn futures are mostly 2 to 7 cents lower this morning, with new-crop leading losses.
- Traders are of the mindset that the recent warmup has allowed farmers to make planting progress this week and that more will be made over the next couple weeks thanks to a more favorable weather outlook.
- But a system will bring more rain the upper Midwest starting today, and this weather system is expected to be followed by cold temps, including freeze chances in some areas.
- Ethanol production fell 1.6% last week to 843,000 barrels per day. Ethanol stocks also fell 200,000 barrels to 16.8 million barrels last week -- the lowest level since late 2011.
- Traders are also beginning to ready positions for USDA's Supply & Demand Report Friday. Pre-report expectations are for USDA to trim its old-crop carryover estimate by 3 million bu. from last month to 754 million bu. and for it to peg new-crop carryover at 1.973 billion bushels.
- Gulf basis firmed a penny for June delivery this morning.
Soybean futures have surged to post double-digit gains for old-crop contracts, with the front month May contract 20-plus cents higher. New-crop is mostly 2 to 4 cents higher.
- Soybean futures are enjoying spreading with corn as a more favorable near-term weather outlook lowers the risk of corn acres being switched to soybeans.
- The market is also benefiting from ongoing signs of solid export demand for a small supply of soybeans. Traders expect USDA to trim its 2012-13 soybean carryover peg by 1 million bu. to 124 million bu. Friday.
- Also, USDA announced a 115,000 MT daily bean sale to China for 2013-14.
- The market expects USDA to project 2013-14 carryover to rebound to 239 million bu., which is limiting buying interest in new-crop futures.
- According to custom's data, China imported 3.98 MMT of soybeans in April, up 3.6% from March but 18.4% below year-ago.
Wheat futures are roughly 5 to 6 cents lower in Chicago and Kansas City while Minneapolis is steady to 5 cents lower.
- Spillover from corn is weighing on the wheat market today.
- Also, the Northern Plains are expected to miss out on this week's precip event and mild conditions are currently in effect. Thus, traders expect advances in spring wheat planting.
- Rain is also falling in the Central Plains today, and more is expected for winter wheat country. This is pressuring the wheat market.
- The market is brushing off news UkrAgroConsult trimmed its 2013 Ukraine wheat crop forecast from 20.87 MMT to 20.16 MMT.
Live cattle futures are off to a mixed start with nearby contracts slightly lower and deferred months slightly higher. Feeder cattle got off to a higher start, but they have since softened to moderately lower trade.
- Yesterday, Choice boxed beef values rebounded back near last week's record-high, calling into question ideas prices had put in a top. Select values also firmed 65 cents, though movement was relatively light at 147 loads.
- Light movement keeps demand concerns close at hand, however.
- But if beef price strength continues, this could give feedlots an advantage in this week's cash negotiations. But countering this are heavier showlist estimates this week.
- Last week, cash trade took place at mostly $128 to $130, and some light sales took place at $126 in Texas and $127 in Iowa yesterday. Nearby futures are well below these prices.
- Demand concerns and recent technical damage for the feeder cattle market are encouraging followthrough selling.
Lean hog futures are enjoying slight to moderate gains in early trade.
- Lean hog futures are benefiting from unexpected strength in early cash hog bids, which signals tightening supplies and that packers are not as well supplied as earlier thought.
- Average hog weights in Iowa and southern Minnesota fell 1.2 lbs. the week ended May 4.
- But mostly steady bids are expected today as packers are dealing with deeply negative cutting margins.
- Performance in the pork cutout value recently has signaled a slowdown in purchases for Memorial Day. Yesterday, the pork cutout value fell 16 cents and movement was unimpressive at 341.4 loads.
- Buying interest in nearby contracts is being limited by the $2.50-plus premium they still hold to the cash hog index, though this has substantially narrowed in recent sessions.