Corn futures have improved to narrowly mixed trade.
- Nearby contracts are enjoying some light short-covering after heavy losses yesterday, as traders fear a sharp price break may entice end-users to cover their near-term needs and supplies remain tight.
- But buying interest is limited by harvest-related hedge pressure. Yesterday's crop progress data was in line with expectations as it showed corn harvest 26% complete.
- Firmer Gulf corn basis is also helping support nearby contracts, as it reflects tight supplies and strong demand.
Soybean futures pared losses with the open of pit trading. November through July futures are now 2 to around 15 cents lower, while deferred months are mostly firmer.
- The soybean market saw heavy followthrough selling this morning, but as outside markets improved, the market trimmed early losses and bargain buyers returned.
- Traders remain very aware of the tight supply situation and the fact that prices have yet to significantly slow use.
- On the other hand, harvest is underway and many are taking advantage of attractive spot prices by selling the crop off the field, which is encouraging some additional profit-taking.
- Beneficial rain in South America is another source of light pressure.
Chicago wheat has softened to favor the downside, while Kansas City and Minneapolis futures are enjoying gains ranging from 2 to 7 cents.
- Wheat futures are enjoying corrective short-covering after heavy losses yesterday.
- Yesterday's Crop Progress Report from USDA emphasized that dryness in the U.S. Central and Southern Plains is causing winter wheat planting to lag the average pace. As of Sunday, 11% of the crop seeded, which compares to 14% on average.
- Plus, concerns about global wheat stocks remain close at hand -- especially in Australia and the Black Sea region.
Live cattle futures are enjoying slight gains in early trade. Feeder cattle futures softened as corn firmed to favor the downside in mixed trade.
- A solid start to boxed beef trade yesterday has justified corrective short-covering in live cattle today.
- This plus tighter showlist estimates this week could give feedlots an edge in cash cattle negotiations. Last week, trade took place at mostly $126 to $127.
- But with packers cutting in the red, reductions to kill hours are possible, which adds some uncertainty. Cash trade is unlikely to take place until late-week.
- Feeder cattle futures are favoring the downside as the market is seeing some corrective short-covering today.
Lean hog futures have backed off early highs, with most contracts now enjoying slight to moderate gains.
- Traders are engaging in short-covering amid ideas the heaviest stage of sow liquidation is in the past with grain prices softening and the cash hog market stabilizing. Early cash hog bids are steady to firmer.
- Ongoing weakness in the pork cutout market signals the market may not be out of the woods yet as prices and movement softened.
- But strength in the U.S. dollar index will limit buying interest to short-covering.