Corn futures are narrowly mixed in lackluster trade.
- Pressure on corn is being limited by weakness in the U.S. dollar index, although ongoing fiscal cliff negotiations are a drag on many markets, including the raw commodities and stock markets.
- News Taiwan bought Brazilian corn is limiting buying, although traders recognize demand destruction is ongoing given historically high prices.
- Gulf corn basis is 2 cents lower for immediate shipment, but up 10 cents for March delivery.
Soybean futures are mostly 1 to 5 cents lower on profit-taking, although overnight price action was choppy.
- Soybeans futures have softened after initially trading higher overnight on dollar weakness.
- News Taiwan has passed on a tender to purchase U.S. soybeans due to high prices is contributing to the softer price tone.
- While areas of Brazil are still in need of rains to alleviate dry conditions, mentions of record South American soybean production are also helping to limit buying in soybeans this morning.
Wheat futures are steady to slightly firmer at all three exchanges.
- Weakness in the U.S. dollar index is encouraging light short-covering, though this is not attracting general commodity buying interest as gold and crude oil are lower -- signaling a risk-off day is ahead.
- Also providing light support is news ABARES has lowered its estimate of Australian wheat production to 22 MMT, which if realized, would be down 26% from last season.
- Traders are also digesting news Ukraine's ag ministry said it's "hopeful" exporters will adhere to an agreed-to cap on wheat shipments, which has already been reached. This reminds the market of the tight supply situation and expectations the U.S. will soon begin to garner a larger share of global business.
Live cattle futures are called to open steady to weaker as traders are cautious about this week's cash markets.
- Live cattle posted slight gains yesterday and December cattle are trading at a premium to last week's cash trade. With this week's showlist up slightly from last week, futures are vulnerable to some profit-taking.
- Concerns about fiscal cliff negotiations are expected to lead to a risk-off day of trade in the commodity markets.
- Yesterday, Choice boxed beef values firmed 29 cents and Select was up 39 cents on lighter movement of 141 loads. But packers who have worked with negative margins for quite some time will be hesitant to raise bids.
Lean hog futures are called steady to weaker on concerns about packers' negative profit margins.
- Lean hog futures are vulnerable to profit-taking after some packers saw profit margins slip back into the red. With gains in the cash market outpacing those in futures, traders will reevaluate positions.
- Pork cutout values improved 98 cents yesterday, which signals demand is strong heading into the holidays. This should help to limit pressure on futures.
- December lean hog futures are trading at around a $3.50 premium to the cash hog index, which raises the risk of profit-taking.