Corn futures have extended losses to trade 10 to 13 cents lower through the July 2014 contract.
- Followthrough selling weighed on corn futures overnight after support at the bottom of the extended, choppy range was violated yesterday.
- In addition to the technical-based selling, pressure is coming from a disappointing weekly export sales report, which featured sales of only 114,400 MT for 2012-13 and 5,800 MT for 2013-14.
- Ongoing fiscal cliff concerns are overriding support from a weaker dollar.
Soybean futures have extended early losses to trade 16 to 19 cents lower through the July contract. Farther deferred futures are posting slightly lesser declines.
- This week's selloff in the soybean market is continuing this morning amid a combination of fundamental pressure and technical-based selling.
- USDA announced China canceled 540,000 MT of soybean purchases for 2012-13. This is on top of cancellations totaling 420,000 MT (300,000 MT to China and 120,000 MT to unknown destinations) earlier this week.
- Weekly export sales came in just below the bottom end of the pre-report guess range at 619,400 MT for 2012-13 and 10,500 MT for 2013-14. Still, the sales pace is stronger than what's required to hit USDA's export forecast.
- Technically, soybean futures appear headed for a test of support at the November low, which is the next level of strong chart support on the daily charts.
Wheat futures have extended losses to trade mostly around 18 to 20 cents lower in Chicago, mostly 12 to 13 cents lower in Kansas City and mostly 7 to 11 cents lower in Minneapolis.
- Spillover from corn and especially soybeans is weighing on wheat futures.
- Additional pressure is coming from technical-based selling as futures continue to slide after recently violating key support at the bottom of the extended, choppy range.
- Weekly export sales were just above the top end of the trade guess range at 651,100 MT for 2012-13 and 20,000 MT for 2013-14. But the positive demand news is being overshadowed as traders still feel U.S. wheat is not competitively priced.
- Traders are also ignoring weakness in the U.S. dollar index.
Live cattle futures are expected to open with a lower tone. Feeder cattle are also expected to open steady to lower, although selling interest could be limited by pressure on corn futures.
- Live cattle traders are expected to take profits following yesterday's strong gains, with encouragement to do so coming from positioning ahead of Friday afternoon's Cattle on Feed Report and amid ongoing fiscal cliff uncertainty.
- Traders are still waiting on active cash cattle trade in the Plains. The winter storm that blasted parts of the Plains and Midwest could limit cash cattle trade. Plus, traders are buying for a holiday-shortened trading schedule next week.
- Feeder cattle futures are expected to follow live cattle lower, although pressure on corn futures should help limit selling interest and may attract some buying.
Lean hog futures are seen opening steady to lower on a corrective pullback .
- Hog traders are expected to take profits this morning following yesterday's rally.
- Fiscal cliff uncertainties and pre-holiday trade are expected to add to the price pressure as buying interest is limited.
- Cash hog bids are expected to be steady at most locations today, although hog movement will be limited by the wintry weather conditions.