Corn futures are 1 to 2 cents higher this morning, with old-crop contracts leading gains.
- Old-crop futures are leading gains this morning as traders recognize the tight stocks situation. USDA left its 2012-13 carryover projection unchanged on Friday, which is slightly supportive as traders expected carryover to climb slightly.
- But with no major surprises from USDA's report, traders are turning their focus to planting intentions. Wet conditions across the Corn Belt suggest corn planting will not start early, as it did last year, but is helpful in recharging soil moisture.
- Also this morning, USDA issued an export sales announcement correction, which included sales of 120,000 MT of corn to China for 2013-14.
- Gulf corn basis is 1 to 2 cents softer for nearby delivery to reflect a slowdown in demand and improved Mississippi River conditions.
Soybean futures have softened from double-digit levels seen earlier to trade fractionally to 6 cents higher in most contracts.
- Old-crop soybeans are firmer, with new-crop futures mixed amid bull spreading.
- Traders were disappointed that USDA left its 2012-13 carryover projection unchanged on Friday, but believe the export projection needs to be raised due to ongoing shipping delays at South American ports.
- Also this morning, USDA issued an export sales correction announcement. Previous sales of 345,000 MT announced to China for 2013-14 were actually 225,000 MT.
- Meanwhile, Gulf soybean basis is up 4 cents for immediate delivery to stand 84 cents above May futures. Basis is mostly 1 cent higher for spring and early summer delivery.
- A mix of precip across the Corn Belt over the weekend and this morning is helping to recharge soil moisture, which is limiting buying in new-crop futures.
Wheat futures are narrowly mixed in lackluster trade.
- Wheat remains in a follower's role and is choppy amid a lack of fresh news this morning.
- USDA's higher carryover figure for 2012-13 compared to last month remains on traders' minds this morning and is limiting buying in wheat futures.
- As a result, May Chicago wheat is trading at a discount to May corn futures, as old-crop wheat futures search for a level that boosts demand.
- Following recent beneficial moisture across the Southern Plains, dry conditions are expected this week, which may renew concerns about the struggling HRW wheat crop.
Live cattle futures are called mixed as traders wait on the boxed beef market for direction.
- Live cattle futures are expected to see a mixed start on a combination of followthrough pressure amid demand concerns and short-covering as April live cattle are trading at a discount to last week's cash trade.
- Traders will be keeping a close watch on the boxed beef market early this week as they fear surging beef prices have slowed demand.
- Boxed beef prices ended last week mixed, but for the week were sharply higher.
- It will be difficult for the market to generate much more than short-covering given ongoing demand worries and as traders wait on cash trade to develop.
Lean hog futures are called mixed, with pressure limited by signs the market has bottomed.
- Futures are expected to see a choppy start, with buying limited by concerns about demand but pressure limited by technical indications the market has bottomed.
- To confirm last week's recovery in futures was the start of a larger price correction, the market needs to build on those gains. That could be difficult given ongoing weakness in the pork cutout market, which is keeping packer demand for cash hogs light.
- But poor road conditions across a large area of the Corn Belt this morning will slow hog marketings and could cause some packers to raise bids.
- Packers have room to raise bids as profit margins are in the black, though barely.