Corn futures remain under light pressure with most contracts down 3 to 5 cents.
- This morning's Weekly Export Inspections Report reminded traders of ongoing lackluster corn demand. Inspections of 9.5 million bu. met expectations but the tally was unimpressive and roughly 5.3 million bu. below week-ago.
- Steady Gulf basis levels this morning and at midday signal the demand story is unlikely to change in the near future.
- Otherwise, fresh news is lacking, leaving futures vulnerable to profit-taking.
- Plus, traders expect both U.S. and global production to recover for the 2013-14 marketing year.
- While there are concerns about dryness in Argentina, South America is still expected to produce a large corn crop.
Soybean futures have rallied to trade 30- to 40-plus cents higher in old-crop futures. Deferred months are enjoying gains in the teens to 20s.
- Soybean futures have extended early gains on signs global demand for U.S. soybeans has not yet slowed.
- Weekly soybean export inspections of 40.384 million bu. topped expectations and the week prior by a wide margin.
- Plus, USDA this morning announced China purchased 120,000 MT of beans for 2012-13 delivery.
- Meanwhile, dryness in key production areas of Argentina remains a source of support as does recognition getting South American supplies shipped is not always a smooth process.
- Thus considering very tight U.S. supplies, traders are viewing last week's price slide as overdone.
Wheat futures remain under pressure with most contracts posting losses between 10 and 13 cents at all three locations.
- Chances for heavy rain in the Southern Plains later this week and above-normal rain in the forecast for the Central Plains over the next 6 to 10 days is weighing on the wheat market.
- The same can be said for news India is considering allowing private companies to export to up to 5 MMT from government stocks. (Currently, just state-run firms are allowed to export up to 4.5 MMT).
- This is offsetting signs U.S. wheat prices may finally be competitively priced on the global export market. Weekly wheat export inspections of 30.335 million bu. came in well above expectations and around 7 million bu. above last week's tally.
- But traders will await proof U.S. wheat is finally attracting export demand before adding long positions.
Live cattle futures have improved to mixed trade trade. Feeder cattle futures are posting slight losses.
- Nearby futures are being pressured by the fact that they are at a premium to last week's cash cattle trade at mostly $123.
- But a surge in boxed beef prices and movement this morning improves prospects for this week's cash action. Choice and Select values rose $1.18 and $1.17, respectively, this morning and movement surged to 276 loads.
- But considering the boxed beef market's struggle to put in a low, traders will await proof it has done so before adding long positions.
- Showlist estimates are heavier this week, but a late-week winter storm event could make supplies more difficult to come by later this week.
Lean hog futures continue to post moderate losses at midday.
- Traders remain concerned about the product market's struggle to put in a low, which has resulted in long-negative packer profit margins.
- But a surge in pork movement to 43.5 loads this morning could signal the market has found a value level and that the seasonal uptick in demand is getting started.
- But until this is "proven," upside potential is limited.
- Cash hog bids are steady to lower today as packers are generally thought to be well supplied and some plants have trimmed kill hours in an effort to boost margins.
- Plus, the six-day slide in the cash hog index means traders are in no hurry to trim the steep discount nearby futures hold to the index.