Corn futures are 1 to 2 cents higher in all but far-deferred months, which are mixed.
- A weaker U.S. dollar index and ideas the downside was overdone yesterday are encouraging light short-covering in the corn market today.
- The market is also benefiting from some spread unwinding with soybeans.
- Farmers are in the final stages of harvesting a record-large 2013 crop. Plus there is unease EPA's proposal to lower the corn ethanol component of the Renewable Fuels Standard could diminish demand for corn. Both of these factors limit buying interest.
- But selling interest is also being restrained by signs of improved export demand, the latest being yesterday's stronger-than-expected export inspections tally for corn.
- South Korea tendered to buy 210,000 MT of optional origin corn this morning.
Soybean futures have softened to trade mostly 4 to 9 cents lower this morning, with nearby contracts leading to the downside.
- Spread unwinding with corn is weighing on the soybean market this morning, as is spillover from the soymeal market.
- Traders are brushing off news China purchased 240,000 MT of U.S. soybeans for 2014-15 delivery, as strong demand is known. There is also some talk Chinese importers may be canceling some previous U.S. bean purchases.
- Gulf soybean basis is steady for 2013 delivery, 1 to 2 cents higher for January and February and 5 cents lower for March delivery.
Wheat futures are fractionally to 2 cents higher in most contracts of all three flavors.
- USDA unexpectedly lowered the amount of wheat rated "good" to "excellent" by 2 percentage points yesterday to 63%.
- When these numbers were factored into Pro Farmer's weighted Crop Condition Index (0 to 500 point scale), the HRW crop slipped 3 points to 366, while the SRW crop held steady at 380.
- Gains in the corn market and weakness in the U.S. dollar index are also supportive.
- The same can be said for yesterday's stronger-than-anticipated export inspections reports and recent export buys by Asian countries.
- Countering this, however, is news Egypt bought 120,000 MT of Russian wheat today, which reminds of export competition.
Live cattle futures gapped lower on the open and most contracts are currently posting slight losses. Feeder cattle futures are posting similar losses.
- Live cattle futures are seeing followthrough pressure today after the market broke out of its uptrend yesterday.
- Adding pressure, the boxed beef market got off to an unimpressive start Monday. Select cuts firmed $1.27, but Choice softened 60 cents and movement slowed to 115 loads. This again brings up demand concerns.
- December live cattle are now at a slight discount to last week's cash trade at $132, signaling less friendly early cash expectations this week.
- Showlist estimates are near steady with week-ago as gains in Nebraska and Texas are more than offset by decreases in the available supplies in Colorado and Kansas.
- Anticipation of new COOL rules coming into full force, adding costs at all levels of the cattle industry, is also weighing on the market.
- Mild strength in the corn market is weighing on feeder cattle futures.
Lean hog futures are mixed in early trade.
- Some lean hog futures contracts are seeing some light short-covering after yesterday's losses. Others are engaging in some light followthrough sales.
- Cash hog supplies continue to mount, which is weighing on the cash market. Early bids are steady to lower, despite still-wide packer profit margins.
- But improvement in the product market Monday is helping limit pressure. The pork cutout value firmed 89 cents yesterday and while movement was light compared to last week's impressive load counts, movement of 337.69 loads still represents decent demand.
- The lean hog index continues to soften, keeping it at nearly a $2 discount to the December lean hog contract. This is also pressuring the front-month contract.