Corn futures have extended gains to trading 9 to 10 cents higher.
- Funds are actively buying corn today to lighten their short exposure to the market after building record-large short position ahead of USDA's November crop report.
- Traders still have USDA's Friday report data on their minds, in which USDA pegged the corn crop at 13.989 billion bushels. While this still represented an increase from September, it was smaller than traders expected.
- Following Friday's bullish reversal, a high-range close today would be the first sign the market is working on a near-term low.
- Unwinding of long soybean/short corn spreads is also supporting corn futures today.
- A weaker U.S. dollar index is also supportive, although traders recognize the dollar appears to have posted a near-term low in late October.
Soybean futures have improved to trade marginally higher in all but the November contract, which is slightly lower.
- Soybean futures have improved on spillover from corn futures.
- But traders are hesitant to extend long positions after last week's strong rally.
- Traders still have Friday's USDA reports on their minds that showed carryover supplies coming in at tighter than anticipated levels thanks to higher usage projections.
- However, USDA's production estimate came in a bit higher than anticipated at 3.258 billion bushels.
- This morning Gulf basis fell 3 cents for immediate delivery, signaling increased farmer sales.
- Spread unwinding with the corn market today is limiting buying in soybean futures.
- January beans are pivoting around resistance at Friday's high of $12.97 1/2.
Wheat futures have softened to trade mixed.
- Spillover from the corn market has lessened, with wheat turning mixed after a stronger start to the day session.
- Weakness in the U.S. dollar index is helping to limit pressure, but traders say they need a dose of fresh demand news to encourage buying.
- Favorable weather across the HRW Wheat Belt is limiting buying, as traders note the crop is off to a very favorable start.
- Gulf SRW wheat basis is steady for immediate delivery this morning to suggest supplies and demand are balanced.
- Traders are still digesting USDA's Crop Production and Supply & Demand Reports today. Friendly corn production data is getting more attention than a larger-than-expected 2013-14 wheat carryover projection figure.
Live and feeder cattle futures continue to favor a firmer tone in lackluster trade.
- Live cattle futures have moved off session highs, but continue to trade in positive territory amid lackluster trade.
- The lack of USDA data is limiting traders' interest in doing more than even positions.
- This week's showlist is thought to be larger than last week as some feedlots did not actively sell cattle at $1 to $2 lower prices last week.
- Therefore, key for the cash market will be how the boxed beef market performs this week.
- There is no USDA data available today due to the federal holiday.
- The fact that December live cattle are trading at a premium to the bulk of last week's cash trade signals attitudes remain positive.
- December futures are trading at nearly a $2 premium to the bulk of last week's cash action. This is limiting buying interest.
- Feeder cattle futures are favoring a firmer tone, but upside potential is being limited by strength in the corn market.
Lean hog futures remain mixed amid position squaring.
- Price action in the hog pit remains limited to position squaring.
- Without USDA data, many traders are opting to remain on the sidelines today.
- A better-than-expected start to the cash market for the week is supportive of short-covering this morning.
- The cash market is mostly steady, but some scattered firmer bids are being reported. With packers' profit margins well in the black, demand for hogs remains strong.
- But a seasonal build in hog supplies and weights is limiting packers' enthusiasm to raise bids.
- December lean hog futures are trading at around a $2 premium to the cash index, which signals attitudes remain cautiously optimistic about the cash market.