Corn futures remain split with old-crop marginally higher and new-crop down 3 to 6 cents.
- Old-crop corn futures are enjoying some light short-covering amid ideas the downside has been overdone and hopes prices have dipped far enough to attract export demand.
- But this morning's Weekly Export Inspections Report for the week ended April 4 did not give any indications this had yet occurred. Inspections of 10.098 million bu. fell well short of expectations and declined nearly 10 million bu. from the week prior.
- New-crop contracts are being pressured by negative outside markets and beneficial rains for the Corn Belt throughout the week. However, this will keep farmers out of the field.
- Traders are also beginning to ready for the Supply & Demand Report Wednesday, which is expected to include USDA raising its 2012-13 corn carryover projection based on the Quarterly Grain Stocks Report in March.
Soybean futures have pared early gains to trade roughly 6 to 10 cents higher in old-crop and narrowly mixed in new-crop futures.
- Old-crop soybean futures are enjoying some light short-covering as some view current prices as a value. But if the market does not soon receive news of increased end-user buying, this could fade.
- A penny decline in Gulf basis for immediate delivery at midday is not indicative of this.
- Today's weekly export inspections data was also unimpressive for beans. Export inspections of 15.251 million bu. met expectations but the tally declined relative to the week prior and year-ago.
- Traders are also engaging in some light short-covering ahead of USDA's Supply & Demand Report Wednesday. Traders are concerned the report may not line up with USDA's Quarterly Grain Stocks Report that indicated larger-than-expected supplies.
- Buying interest in new-crop beans is being limited by prospects that a delayed start to corn planting could boost soybean acres from March intentions.
- In addition, it appears the Chinese bird flu situation is better contained than some thought; this has eased concerns about decreases in China's crushing needs.
Wheat futures remain the upside leader today with Chicago wheat up 10 to 13 cents, Kansas City wheat up 12 to 17 cents, and Minneapolis roughly 6 to 11 cents higher.
- Traders are covering short positions in anticipation of another reminder of the poor condition of the HRW wheat crop this afternoon.
- Light support also stems from the possibility of freezing temps in the Central and Southern Plains this week.
- Countering this is rain in the forecast for the Southern Plains this week, though the extended forecast calls for below-normal precip chances.
- And U.S. wheat remains competitive globally. Weekly export inspections of 27.161 million bu. topped expectations and improved nearly 1 million bu. from the week prior.
- The market is also benefiting from confirmation that the state-run China National Grain and Oils Information Center confirmed over the weekend the country purchased 14 to 16 cargoes (nearly 1 MMT) of U.S. SRW wheat late last week.
Live cattle futures have improved to post slight to moderate gains in most contracts at midday. Feeder cattle futures are moderately higher.
- Traders are covering short positions to start the week amid ideas the downside has been overdone.
- Nearby contracts are also benefiting from the discount they hold to last week's mostly $128 cash cattle trade.
- However, deferred contracts' discount to the cash market is indicative of questions about how the beef market will fare in the face of tightening supplies and an anemic jobs market.
- Boxed beef market performance signals less than rosy demand, despite the seasonal tendency for a grilling-related rally. This morning, Choice cuts slid 23 cents and Select rose 54 cents. Movement was again light at 76 loads.
- The recent price break in corn futures is also supportive of feeder cattle buying.
Lean hog futures continue to enjoy moderate gains in most contracts.
- Strength in the cash hog market is encouraging short-covering today. The fact that packers are paying up for supplies despite negative profit margins signals they are not as well supplied as earlier thought.
- Recent cash market strength has helped the cash hog index narrow the previously wide gap to the April lean hog contract to around 60 cents.
- But until the pork market improves, buying interest will remain limited to short-covering. In recent sessions the pork cutout value has struggled to put together consecutive days of gains and movement has been relatively light.
- Today looks to be much the same story as zero loads changed hands this morning.
- Traders also still have Friday's disappointing jobs report on their minds. Economic strife could encourage consumers to throw pork on the grill rather than beef or even poultry.