Corn futures are favoring a weaker tone, with most contracts 1 to 2 cents lower.
- Pressure on corn futures is being limited by weakness in the dollar index, although the dollar has moved off its earlier lows.
- Gulf corn basis is steady to 3 cents lower this morning to reflect demand destruction.
- Otherwise, there's little fresh news for traders to digest, which is contributing to the choppy to lower trade.
- March corn futures have slipped below support at yesterday's low of $7.26 1/4, but remain within the boundaries of last week's trading range.
Soybean futures are 4 to 7 cents lower on light profit-taking following yesterday's strong gains.
- Futures are seeing light profit-taking after futures posted new-for-the-move highs yesterday. A weaker dollar is limiting pressure.
- Traders continue to keep a close watch on South American weather developments. Hot and dry conditions in Argentina and southern Brazil are raising concerns about the crop there, although favorable conditions in northern Brazil keep traders hopeful of a record crop.
- Gulf soybean basis is steady this morning and there is no fresh export news to report after the recent flurry of Chinese purchases.
- Bulls hold the near-term advantage, especially after futures moved to fresh monthly highs yesterday.
Wheat futures are mostly 1 to 2 cents lower in Chicago, while Kansas City and Minneapolis wheat futures are mixed.
- With little fresh news for the market to digest this morning, wheat future are favoring a softer tone on spillover from neighboring markets.
- Weakness in the U.S. dollar index is limiting pressure, although wheat needs a dose of fresh export news to ignite bulls.
- Concerns about dryness in the U.S. Southern Plains remains on traders' mind, although with the crop in dormancy, this isn't a major market factor.
Live cattle futures are called to open steady to weaker, but could quickly firm as futures remain oversold.
- Live cattle are expected to see a weaker start as traders react to yesterday's Cold Storage Report that showed frozen beef stocks above expectations at 465.5 million lbs. -- 2% above year-ago.
- But focus should quickly shift to the strong start to the week in the boxed beef market. Choice boxed beef values firmed 75 cents and Select cuts rose $1.29 on very strong movement of 394 loads.
- This week's cattle showlist is smaller than last week, which gives feedlots more bargaining power -- especially if the product market continues to strengthen.
- Live cattle futures remain oversold according to the 9-day Relative Strength Index, which could spur some value buying given the positive fundamental outlook.
Lean hog futures are called to open steady to weaker in reaction to bigger-than-expected pork stocks in frozen storage.
- Futures are expected to see early pressure from yesterday's Cold Storage Report, which showed frozen pork stocks at the end of December topping expectations at 554.4 million lbs, which is 11% higher than year-ago.
- Meanwhile, the pork cutout value improved $1.23 yesterday to boost packer margins, although they remain in the red.
- The cash hog market is expected to be mostly steady today, although some packers are short-bought on this week's needs.
- Frigid temps across the bulk of the country are limiting hog movement, which could cause packers to raise cash bids in some locations despite negative margins.