Corn futures are little changed from this morning, with new-crop down 5 to 6 cents and deferred contracts down 9 to 11 cents.
- Action in new-crop futures signals traders expect the majority of 2013 intended corn acres to be planted thanks to forecasts for warmer and drier conditions from private weather watchers next week.
- However, the National Weather Service 6- to 10-day forecast calls for above-normal precip for areas of the northern and eastern Corn Belt.
- Traders are brushing off USDA's crop progress update yesterday that showed planting at just 4% complete, compared to the five-year average of 16% complete.
- Pressure on old-crop futures is being limited by tight supplies made even harder to obtain by Mississippi River closures due to flooding. Gulf basis surged 9 cents for immediate delivery this morning.
- Outside markets are a mixed bag today with the U.S. dollar index firmer and the stock market sharply higher.
Old-crop soybean futures have improved to trade 10 cents higher in the May contract and mixed in other months, while new-crop futures have pared losses to 1 to 2 cents.
- Nearby contracts are benefiting from concerns about tight old-crop supplies. Gulf basis surged 11 cents for early May delivery this morning, then fell 15 cents at midday. But basis for April and late May delivery rose 5 cents at midday.
- This, plus USDA's announcement that China bought 392,000 MT of soybeans for 2013-14 signals South American supplies are not yet readily available.
- New-crop beans remain pressured by expectations bean plantings will come in above USDA's March Prospective Plantings Report. Plus, the crop will be planted into soils that have been replenished by recent, heavy precip.
- There are also concerns that a slowdown in China's economic growth could limit the country's export demand going forward. Its HSBC flash purchasing managers' index declined in April and the bird flu situation is expected to drag down the country's yearly economic growth.
Wheat futures have also improved ahead of midday to trade 6 to 8 cents lower in Chicago, mostly 2 to 4 cents lower in Kansas City and steady to a penny higher in Minneapolis.
- Spillover from corn and strength in the U.S. dollar index are pressuring Chicago and Kansas City wheat.
- But Minneapolis wheat is being pressured by confirmation of a slow start to spring wheat planting. Just 7% of the crop had been seeded as of Sunday, compared to 52% last year and 24% on average. Snow overnight for the Northern Plains will keep producers out of the field for some time.
- Chicago and Kansas City wheat have moved off early lows amid concerns about freeze damage to the HRW crop. The Pro Farmer weighted Crop Condition Index shows the HRW wheat crop declined by nearly 8 points last week to 264 on a 0 to 500 (excellent) point scale. Freeze warnings are in effect as far south as Texas today.
- Also weighing on wheat futures this morning is news that Ukraine appears ready to lift its ban on wheat exports for the remainder of 2012-13, though the country is not likely to be an active exporter of wheat.
Live cattle futures continue to enjoy slight to moderate gains. Feeder cattle futures are sharply higher.
- Traders continue to engage in corrective short-covering on signs of improvement in the product market.
- This morning, Choice cuts firmed 80 cents and Select rose 82 cents on strong movement of 103 loads. Continued improvement in the boxed beef market would confirm a seasonal low is in place.
- A warmer, drier forecast for the weeks ahead is also supportive of a seasonal grilling rally.
- Gains are being limited by yesterday's highly bearish Cold Storage Report for beef, which reflected record-large frozen beef stocks for the end of March.
- For packers to pay for higher prices for cash cattle this week, marked improvement must be seen in the beef market as showlist estimates are up this week and they are still dealing with negative cutting margins.
- Strength in the corn market and corrective short-covering after a move to new contract lows yesterday is encouraging strong gains in feeder cattle futures. Some contracts dipped into oversold territory yesterday.
Lean hog futures continue to enjoy slight to moderate gains at midday.
- Ideas the downside has been overdone and spillover support from live cattle is supporting lean hogs today.
- Ongoing strength in the pork market signals a seasonal rally is underway, keeping attention away from yesterday's disappointing Cold Storage Report data.
- This morning, the pork cutout value rose another 66 cents on impressive movement of 272.8 loads.
- Pork strength has kept packer profit margins solidly in the black. This plus tightening market-ready supplies are translating to mostly steady cash hog bids.
- Snow in areas of the western Corn Belt overnight may disrupt transportation today. Meanwhile, flooding in the eastern Belt has disrupted slaughter operations for some.
- Gains in the May lean hog contract are being limited by the steep premium it holds to the cash index.