Corn futures are 3 to 7 cents higher on help from positive outside markets and spillover from soybeans.
- Corn started the overnight session under pressure but firmed as soybean futures turned higher. A high-range close today would produce bullish reversals in many contracts.
- The U.S. dollar index is softer this morning on disappointing 4th-qtr. GDP that signals the U.S. economy contracted for the first time in more than three years. The estimate, at -0.1%, was largely due to cuts in federal spending.
- Also supportive is Gulf corn basis, which is steady to 3 cents higher for nearby delivery and stands 55 cents above March corn futures for February delivery. The recent improvement in Gulf corn basis has raised rumors China is stepping up its corn purchases.
Soybean futures are 11 to 18 cents higher on concerns about the weather in South America.
- Hot and dry conditions in Argentina and southern Brazil are raising concerns about developing and filling crops. There are some showers in the forecast for Friday, but a return to drier weather is expected next week.
- Meanwhile, conditions remain mostly favorable in the Brazilian states of Parana and Mato Grosso, which is maintaining expectations for a record Brazilian bean crop.
- Traders are also noting the potential for shipping delays at Brazil's ports as ships are already backed up as they wait for new-crop supplies to become available. Depending on the delays, some ships could head to the U.S. for supplies.
- On top of new-crop soybean purchases of around a half-million-metric-tons made last week and sales of 220,000 MT of 2013-14 U.S. soybeans to China on Monday, this morning USDA announced China purchased another 175,000 MT of 2013-14 soybeans.
- The recent surge in new-crop soybean purchases by China signals prices are a value.
Wheat futures at all three exchanges are mostly 3 to 4 cents higher on spillover from neighboring pits.
- Wheat futures are seeing a boost from positive outside markets and on spillover from neighboring pits.
- Russia's head meteorologist pegs 9.5% of the country's winter wheat crop as "poor," which is lower than last year at this time.
- Meanwhile, Interfax reports Russia's ag ministry as saying the country may export 15 MMT to 20 MMT of grain in 2013-14 due to better crop prospects.
- Portions of the Southern Plains HRW wheat region received some much-needed moisture from the winter storm moving across the heartland, but much more precip is needed.
Live cattle futures are called to open mixed as traders reevaluate positions.
- Live and feeder cattle futures are expected to see a choppy start on the combination of spillover from yesterday's profit-taking and value buying given the bullish outlook.
- While traders still anticipate $1 to $2 higher cash cattle trade due to the tighter availability of market-ready supplies, packers are hesitant to raise bids due to weakness in the beef market.
- Yesterday, Choice beef values slipped 72 cents and Select declined $1.32 on decent movement of 170 loads.
- Winter weather across the Plains and Midwest should also help to support the market this morning.
- Strength in the corn market could weigh on feeder cattle futures.
Lean hog futures are called to open steady to firmer due to winter weather disruptions.
- Hog futures should see a boost this morning from travel advisories across the Midwest due to winter weather, which is slowing the movement of animals.
- As a result, the cash hog market is called steady to higher today as packers work to secure this week's kill when the weather improves.
- Additional support in the hog pit is expected from strength in the pork cutout market, as values firmed 95 cents yesterday to lift packers' profit margins close to breakeven.
- Outside markets are also supportive of commodity buying this morning.