Corn futures have reversed early gains to trade 9 to 13 cents lower in old-crop contracts, while new-crop is mostly 3 to 4 cents lower.
- Early gains in the corn market have given way to profit-taking.
- Pressure on corn futures signals the market is not yet overly concerned about the likelihood of planting delays and lower corn acres due to persistent cold, wet weather. Rather, they are focused on the long-term benefits to the soil.
- Plus, Gulf basis slid 5 cents for April delivery and a penny for May delivery at midday, signaling increased farmer selling and/or limited export demand.
- Weekly export sales of 400,300 MT for 2012-13 and 16,900 MT for 2013-14 met expectations.
- The Climate Prediction Center's outlook for May calls for above-normal temps in the southwest area of the Corn Belt while most of the eastern Belt is forecast to have below-normal rain changes.
- Strategie Grains raised its 2013-14 corn production peg for the European Union by 500,000 MT to 64.6 MMT.
Soybean futures are mostly 1 to 8 cents higher at midday, with nearbys leading gains.
- Soybean futures are benefiting from reminders of solid demand for U.S. beans.
- USDA this morning announced China bought 252,000 MT of U.S. beans for 2013-14.
- And Gulf soybean basis rose 5 cents for immediate delivery this morning and 10 cents for May delivery at midday. This signals more export demand news is likely ahead.
- Weekly export sales of 339,400 MT for 2012-13 and 227,400 MT for 2013-14 matched expectations and kept the pace of exports well ahead of that needed to meet USDA's export forecast.
- Gains in new-crop beans are being limited by expectations soybean acreage will easily top USDA's March 28 projection for 77.1 million acres.
- Cold, wet weather (including snow) will likely encourage some growers, especially in the upper Midwest, to switch corn acres to beans.
Wheat futures have softened to post losses of 3 to 4 cents in Chicago, while Kansas City is favoring the downside in mixed trade and Minneapolis is 9 cents higher in the front-month, while other contracts are narrowly mixed.
- Spillover from corn has encouraged some profit-taking in the wheat market.
- But selling interest is being limited by impressive weekly export sales of 552,100 MT for 2012-13 and 1.123 MMT for 2013-14. But the impact of such large sales is considered factored into prices as the market knew China was buying significant tonnage of U.S. wheat.
- Light support also comes from news Strategie Grains lowered its EU-28 wheat production forecast by 500,000 MT to 131.1 MMT, although that is still up 5% from 2012.
- Minneapolis wheat is benefiting from cold and wet conditions that continue to delay spring wheat planting.
- Meanwhile, selling interest in Chicago and Kansas City is being limited by freeze chances for the Central and Southern Plains tonight.
Live cattle futures continue to see choppy trade with nearbys favoring the downside. Feeder cattle futures are posting slight to moderate losses.
- Traders are not convinced that beef demand is on the mend, especially considering the forecast for cold, wet weather.
- This morning, Choice boxed beef values fell 44 cents and Select declined 11 cents; movement was relatively strong however, at 122 loads.
- So far this week, just very light cash cattle trade has taken place at $125 Monday and Wednesday, which is down $2 from the week prior.
- Today's decline in boxed beef prices along with higher showlist estimates could make it tough for feedlots to improve on cash prices early this week.
- Weekly beef exports sales did rise notably from last week to 16,800 MT.
- Traders are also beginning to ready positions for Friday's Cattle on Feed Report. Pre-report expectations are for On Feed to come in at 93.9% of year-ago, Placements at 99.1% and Marketings at 93.5% of last year.
Lean hog futures have improved to post slight to moderate gains in most contracts.
- A weaker U.S. dollar continues to support light short-covering in the lean hog market.
- Traders are encouraged by recent signs that pork demand is improving. The pork cutout value rose 99 cents this morning on solid movement of 226.9 loads. The pork cutout value has risen every day this week and movement has picked up.
- Gains in the pork market have pulled packer profit margins solidly into the black. But as most are well supplied for the week, they are keeping bids steady today.
- The fact that traders are comfortable leaving and even extending the $6.50-plus premium the front-month holds to the cash hog index signals the market expects pork strength to soon give the cash market a lift -- especially as supplies are expected to tighten soon.