Corn futures have turned 1 to 2 cents lower on profit-taking after a disappointing weekly export sales figure.
- The weekly export sales report is weighing on futures, as it showed corn sales of 236,100 MT for 2012-13 and 27,400 MT for 2013-14, which were below expectations. But the tally included 58,000 MT in sales to China.
- With weekly sales coming in lower than anticipated, traders are taking the opportunity to put some profits in the bank.
- Gulf basis is slightly weaker this morning, which is also price-negative.
- Outside markets are limiting selling interest. The U.S. dollar is under pressure and crude oil futures are sharply higher this morning.
Soybean futures are mostly 5 to 9 cents higher, with nearbys lifted by indications of strong demand.
- Soybeans enjoyed followthrough buying overnight on signs of ongoing demand from China.
- Trade sources signal Chinese crushers still need 3 MMT to 4 MMT of soybeans for first quarter delivery and the head of China's state grain policy agency says the country will import around half of the world's soybean exports this year.
- However, weekly export sales of 319,100 MT for 2012-13 were below expectations, as demand was disrupted last week by a shortened holiday week in the United States.
Wheat futures remain mixed in Chicago and Kansas City, while Minneapolis wheat futures have firmed to trade mostly 1 to 4 cents higher.
- Wheat futures are being supported by weakness in the U.S. dollar index, although buying interest is light.
- Helping limit buying interest is a lack of interest in U.S. wheat, which signals prices here are not competitive. Weekly wheat export sales of 279,300 MT for 2012-13 were down 56% from last week and below expectations.
- Whether Ukraine will cap wheat exports is still up in the air as the country has increased its limit on 2012-13 exports to 5.8 MMT. The Ukraine Grain Association says it believes Ukraine could export 6.5 MMT of wheat without causing domestic shortages.
Live cattle futures are called slightly higher on followthrough from yesterday's gains and help from positive outside markets.
- The U.S. stock market is mildly firmer amid optimism lawmakers will strike a deal soon on fiscal cliff negotiations.
- Futures are also expected to find support from the boxed beef market. Yesterday, Choice values firmed 39 cents and Select was up 93 cents on strong movement of 204 loads.
- Improvement in the boxed beef market raises optimism for higher cash cattle trade compared with light cash sales earlier this week, although packer demand is in question given negative margins.
Lean hog futures are expected to be supported by strength in the pork cutout market.
- The pork cutout value rose another 74 cents yesterday and is $8.48 higher the past five days. This has improved optimism over steady to firmer cash hog bids continuing.
- But with December hogs trading at more than a $4 premium to the cash index, the market is vulnerable to profit-taking at any time.
- Outside markets are also a supportive factor for livestock futures. Weakness in the dollar index and mild strength in the stock market is creating a friendly environment for adding risk.