Corn futures are narrowly mixed amid conflicting demand signals.
- This morning's weekly export sales data showed sales of 282,300 MT for 2012-13 and 371,000 MT for 2013-14, which was above expectations.
- But while traders recognize recent demand for old-crop corn and an uptick in new-crop bookings, they are also taking note of end-users seeking alternatives for U.S. corn.
- Gulf corn basis is down 5 cents for immediately delivery to stand 71 cents over May futures. A softening of basis is another sign demand for old-crop corn has softened.
- Recent soil moisture improvements across the Corn Belt are also limiting buying to short-covering in new-crop futures. This week's drought monitor reflects further Midwest drought improvement, although it notes frozen soils limited deep soil moisture penetration.
Soybean futures are mostly 3 to 5 cents lower on followthrough from yesterday's sharp losses.
- The wind came out of bulls' sails yesterday as futures posted a sharp correction and a low-range close. This spurred followthrough selling in overnight trade.
- Traders expect demand for U.S. soybeans to decline as South American supplies become readily available.
- However, more port strikes are scheduled next week in Brazil, which raises concerns about shipping delays from the country.
- This morning's weekly export sales data showed sales of 657,700 MT for 2012-13 and 126,000 MT for 2013-14 -- matching expectations.
- Gulf soybean basis is steady for nearby deliver this morning to stand 75 cents above May futures.
Chicago wheat futures are mixed amid bull spreading, with Kansas City mostly marginally to 2 cents higher. Minneapolis wheat is narrowly mixed.
- May Chicago wheat futures have returned to a premium to May corn futures due to signals end-users are seeking alternatives to U.S. corn
- This morning's weekly export sales data is supportive for wheat futures, as sales of 888,500 MT for 2012-13 and 198,500 MT for 2013-14 were well above expectations.
- Wheat futures have enjoyed corrective trade this week to signal near-term lows have been posted, although much more work is ahead for the contracts to confirm lows are in place.
- This week's drought monitor reflects slight improvement across the Central and Southern Plains, although the large drought footprint remains in place.
Live cattle futures are called mixed as traders wait on cash cattle trade to begin.
- Asking prices and bids are about $5 apart, which signals cash cattle trade is unlikely to begin today.
- Traders still expect at least steady to $1 higher cash trade compared with last week's $128 trade given strength in the boxed beef market.
- Choice beef values have improved by around $1.41 from last week, with Choice now at $197.49 -- up $7 from last year at this time.
- But demand concerns linger, as beef movement has remained lackluster this week, which is limiting packers' demand for cash cattle.
Lean hog futures are called mixed due to demand concerns.
- Traders remain cautiously optimistic lean hog futures have posted a near-term low, but concerns about pork demand is keeping traders from actively rebuilding long positions.
- Adding to concerns about pork demand is that fact that pork cutout values have slipped about a dollar from last week and are around $5 lower than last year at this time.
- Packers have seen profit margins tighten this week, which is limiting demand for cash hogs. The cash market is expected to be mostly steady today.