Corn futures are modestly favoring the upside in mixed trade.
- Traders in the corn market are squarely focused on readying positions for tomorrow morning's USDA reports. This will likely keep action choppy again today.
- Traders expect USDA to lower its production estimate by 77 million bu. to 10.629 billion bu., but traders are anticipating a 16-million-bu. increase to corn carryover.
- This morning's Weekly Export Sales Report showed corn sales of 157,600 MT for 2012-13 and 51,800 MT for 2013-14. While this met expectations and was an improvement over last week, it still represents lackluster demand.
- However, USDA announced Japan bought 152,400 MT of corn for 2013-14.
- Also, Gulf basis levels are steady to firmer this morning and national average corn basis held strong the past week, reminding the market of tight supplies.
Soybean futures have improved to post losses of just 1 to 3 cents through the March contract, while farther deferred months are mildly favoring the upside.
- Traders are removing some risk ahead of USDA's reports tomorrow. Traders expect USDA to raise both its production and carryover estimates slightly from October.
- Also giving bears a slight advantage was a marked slowdown in weekly export sales from recent weeks. Soybean sales of 186,400 MT for 2012-13 and 5,500 MT for 2013-14 fell well short of expectations.
- Brazil's Conab today updated its production forecast. It still expects production between 80.1 million MT (MMT) and 83 MMT, which would be a record-large crop.
- Pressure also comes from a more favorable rain forecast for northern production areas of central and eastern Brazil.
Wheat futures rallied with the open of pit trading to post slight gains in Chicago and Kansas City. Minneapolis wheat is mixed.
- Wheat futures have been choppy this morning as traders are readying for tomorrow's USDA reports. Expectations are for USDA to raise its carryover estimate slightly to 666 million bushels.
- News the Food and Agriculture Organization of the United Nations has lowered its 2012-13 global wheat crop projection by 2.8 MMT from last month to 661.2 MMT is providing light support.
- Also, this morning's National Drought Monitor reminded traders that HRW wheat is in tough shape as drought in the in the Central and Southern Plains is worsening. There is some precip in the forecast for the region over the weekend, however.
- This morning's weekly export sales report showed sales of 209,400 MT for 2012-13 and 11,500 MT for 2013-14. Combined, the tally was still below traders' expectations.
Live and feeder cattle futures are off to a narrowly mixed start.
- Price action is light and choppy in live cattle as traders wait for cash cattle trade to get underway. Most expect packers to prevail in the cash cattle standoff as showlists are up sharply this week and packers' cutting margins are deep in the red.
- But stabilization of the boxed beef market and solid movement this week will give feedlots a bit of leverage and should prevent sharply lower cash trade.
- Also, this morning's export beef sales of 19,400 MT for 2012 and 800 MT for 2013 signal strong export demand.
- The market is also benefiting from news Japan's Ministry of Health, Labor and Welfare has decided to relax the rules to allow beef from cattle under 30 months and hopes to implement the new rules by year-end.
- Feeder cattle futures are choppy as traders weigh slightly lower corn prices against a firmer greenback.
Lean hog futures are off to a choppy to mostly firmer start.
- Selling interest is being limited by improvement in the pork market yesterday. The pork cutout value rose 67 cents yesterday, thanks largely to gains in loins and ribs. Movement was unimpressive, however, at 46.8 loads.
- Traders are engaging in some light profit-taking after yesterday's impressive rally in nearby contracts to bring December futures within $2 of the cash hog index.
- The cash hog market is steady to lower as most packers are well supplied for the week and supplies are plentiful.
- Dollar strength is also limiting followthrough buying interest today.