Corn futures have been choppy, but are currently mostly steady to 1 cent higher.
- Price action in the corn pit has been choppy so far this morning, but futures are currently benefiting from light spillover from soybeans.
- Given lackluster demand for U.S. corn due to historically high prices, buying in futures is limited to short-covering.
- Gulf corn basis is steady to 2 cents higher for April delivery and country basis levels remain historically strong due to tight supplies.
- Buying is also being limited due to ideas the weather pattern is changing to allow for more moisture across the country's midsection. A storm is expected to build in the western Corn Belt later today and last into Friday morning.
Soybean futures are 6 to 13 cents higher on followthrough from yesterday's gains, with old-crop contracts leading the way.
- Soybean futures are enjoying followthrough from yesterday's sharp gains to strongly suggest near-term lows have been posted.
- Traders are reacting to concerns about shipping delays and transportation issues in Brazil, which could extend the export sales season for U.S. soybeans, but also produce a "long tail" for the Brazilian shipping season.
- While there are no export sales announcements this morning, yesterday's news that China was still buying old-crop soybeans signaled the country has not yet fully switched to Brazilian supplies.
- Traders also remain concerned about yield reductions in Argentina, although a more active weather pattern is developing.
Wheat futures have improved to trade mostly 1 to 2 cents higher on indications demand is improving.
- As reported in "First Thing Today," trade sources report China has recently booked about 350,000 MT of U.S. wheat, 400,000 MT of Australian wheat and around 100,000 MT of Canadian wheat.
- Egypt purchased 60,000 MT of U.S. SRW wheat. The only bids received on the tender were for U.S. SRW supplies.
- Gulf wheat basis is mixed this morning, but has improved for nearby shipment to suggest a pickup in demand. Still, traders need a constant dose of demand to signal U.S. prices are once again competitive on the global market.
- Texas state statisticians report 49% of the winter wheat crop is rated "poor" to "very poor" as of Feb. 17, which reflects deterioration from its last report in late November.
Live cattle futures are called to open steady to firmer on support from weather and strength in the boxed beef market.
- Live cattle futures are expected to find support from the weather as cold temps and snow moving across the Southern Plains this morning are stressing animals.
- Additional support is expected from signs the boxed beef market is working on a low. Choice boxed beef values were 52 cents firmer and Select rose 48 cents to start the week. But even more impressive was the fact 366 loads that changed hands.
- But cash cattle trade is largely expected to come in no better than steady with last week's $123 trade due to a slightly larger showlist and lackluster packer demand.
- February live cattle are trading at more than a $3 premium to last week's cash trade, which will limit buying to short-covering.
- Feeder cattle futures could see a short-covering boost given expected strength in live cattle and a lack of buying interest in corn.
Lean hog futures are called mixed, with pressure on nearby contracts limited by oversold conditions.
- A choppy day of price action is likely ahead, although nearby futures are due for a corrective bounce given the sharp discount they hold to the cash index as well as the fact futures are oversold.
- The pork cutout value firmed $1.48 yesterday with 94 loads changing hands. While packer cutting margins remain in the red, they have improved dramatically.
- The cash hog market is called steady to lower as packers work to improve margins further and say they are having no difficulty securing needed supplies.
- But the winter weather advisory that begins for the western Corn Belt tomorrow has traders concerned about marketing disruptions.
- Traders are also concerned about indications China will require certification U.S. pork is ractopamine-free beginning March 1.