Corn futures are 5 to 7 cents lower on followthrough from yesterday's losses.
- A combination of followthrough from yesterday's losses, spillover from soybeans and negative outside markets is weighing on corn futures this morning.
- Traders are also working to even positions ahead of Friday's USDA Supply & Demand Report, which is expected to reflect a slowdown in corn demand, resulting in around a 13-million-bu. increase in carryover from last month.
- But carryover hovering around 600 million bu. is still razor-tight.
- Traders are also taking some weather premium out of the market as forecasts for rains have improved for next week in Argentina and southern Brazil.
Soybean futures are 11 to 13 cents lower on improved rainfall chances for dry areas of South America early next week.
- While hot and dry conditions are seen lingering this week across southern Brazil and Argentina, weather models have increased the likelihood of rains in those areas next week.
- As a result, traders are taking some weather premium out of the market, with additional pressure coming from negative outside markets.
- Traders also look for Chinese soybean demand to wane as the country prepares for next week's holiday.
- Meanwhile, traders look for USDA to trim carryover by around 6 million bu. from last month to 129 million bu. due to strong demand.
Wheat futures at all three exchanges are mostly 1 to 4 cents lower on spillover from neighboring pits.
- Wheat is weaker on spillover from neighboring pits and from strength in the dollar index. Crude oil futures are sharply lower this morning, although gold is firmer.
- Traders are still digesting a flurry of global export developments yesterday, which should eventually raise demand for U.S. wheat as supplies in Europe and the Black Sea region tighten.
- India's farm minister says its cabinet will meet tomorrow to discuss the possibility of freeing additional government wheat stocks for export as the country prepares for new-crop arrivals.
- According to pre-report expectations, traders look for USDA on Friday to raise wheat carryover by around 12 million bu. from last month to 728 million bushels.
Live cattle futures are called to open mixed as traders wait on cash trade to develop.
- Packers have not yet begun to bid for cattle, which signals trade could be delayed until Friday.
- Pressure on futures should be limited by signals the boxed beef market has posted a near-term low. Choice values firmed $1.57 and Select rose 71 cents yesterday on strong movement.
- But following two weeks of sharp price declines, beef values have a lot of ground to recover and packers' profit margins are deep in the red.
- Feeder cattle futures should find support from weakness in the corn market.
Lean hog futures are called to open steady to lower on concerns about pork demand.
- Pork cutout values slipped $1.62 yesterday to push packers' profit margins deep into the red and raise concerns about pork demand.
- The cash hog market is called steady to lower as packers work to improve profit margins. Packers have also lowered their daily slaughter requirements.
- February lean hog futures ended the day yesterday at around a dollar discount to the cash index, which should limit pressure on futures.