Corn futures are 1 to 7 cents higher with nearbys leading gains.
- The corn market is seeing short-covering today as traders are viewing the downside as overdone yesterday.
- While USDA's 2013-14 carryover estimate of 1.456 billion bu. represents plentiful supplies, the tally was on the friendly side of pre-report expectations.
- Gains in the wheat market are adding to the positive tone in corn.
- The market is brushing off news the Rosario Grains Exchange raised its Argentine corn crop estimate by 700,000 MT to 22.7 MMT. This is still below USDA's Argentine crop estimate of 24 MMT.
- Gulf corn basis is steady at midday.
While old-crop beans have faced pressure at times this morning, they are currently favoring the upside. New-crop beans are posting gains in the teens.
- The soybean market is seeing some bull spread unwinding today.
- With spring approaching, new-crop beans are benefiting from some efforts to buy some additional corn acres.
- Buying interest in old-crop futures is being limited by ideas Brazil will eventually sort out its shipping issues, slowing demand for U.S. beans.
- News the Rosario Grains Exchange trimmed its Argentine soybean crop estimate by 300,000 MT to 54.7 MMT is supportive.
- Light support also stems from news Goldman Sachs raised its near-term price outlook for soybeans due to strong export demand and unrest in Ukraine.
- Tight supplies are lifting basis at interior locations. But Gulf soybean basis is 2 cents lower for May delivery while other months held steady.
Wheat futures have extended early gains to post gains in the mid to upper teens across all three flavors.
- Early bargain buying in the wheat market has triggered buy stops. Gains in the corn market is also making it easier for wheat to rally. Warm and windy conditions in the Southern Plains are depleting already dry soils in the region today.
- And in northern locations, another winter weather event followed by a cold blast could cause damage to wheat that is no longer protected by snowcover.
- The market is skeptical regarding an assertion by Ukraine's agriculture minister that the nation's 2013-14 grain exports will likely reach an all-time high of 33 MMT. The minister previously indicated the nation's grain exports would total 32.5 MMT.
- News Japan's ministry of ag is seeking 126,814 MT of food-quality wheat from the U.S., Canada and Australia is also providing light support.
After a strong start, live cattle futures have softened to post slight losses through the October contract, while deferred months are slightly higher. Feeder cattle futures have also softened to post slight to moderate losses.
- Nearby contracts gapped higher on the open, but this quickly gave way to profit-taking. The market has since closed the gap and dipped into negative territory.
- While continued gains in the boxed beef market and tighter showlist estimates would typically point to higher cash cattle trade, feedlots moved cash cattle at lower prices following similar fundamentals last week.
- Thus, traders are comfortable leaving the April contract $5 below the low end of last week's cash trade.
- The surge in beef prices continued this morning. Choice cuts rose $2.18 to $241.08 per cwt. and Select gained $1.47 to $237.46 per hundredweight. Movement was again light at 65 loads, however.
- Gains in the boxed beef market have dramatically improved packer profit margins to stand near breakeven. This could make packers more willing to raise bids this week.
- Strength in the corn market has triggered some profit-taking in feeder cattle futures.
Nearby lean hog futures are holding onto slight gains, but deferred contracts are slightly to sharply lower.
- While strength in the cash and product markets continue to lift nearby contracts, deferred months are seeing profit-taking today as traders work to correct the overbought condition of the market.
- Traders are hesitant to push nearbys lower as recent pullbacks have been quickly followed by heavy bargain buying.
- While the cash hog index continues to climb (it now stands at $106.02), gains in futures have kept the front-month at least $10 above the cash market.
- Light pressure also stems from talk some plants may scale back kill hours.
- Nevertheless, cash hog bids are $1 to $2 higher in the Midwest today thanks to tight supplies. Packers have seen profit margins widen in recent sessions, which makes them more willing to pay up for market-ready hog supplies.
- The pork cutout value firmed another 74 cents this morning amid strong gains in loins, butts, picnics and ribs. Even more notable is an uptick in movement to 181.92 loads.
- The porcine epidemic diarrhea virus (PEDV) means this trend could be even more pronounced this year.