Corn futures continue to enjoy gains around 4 to 7 cents in most contracts.
- Corn futures continue to enjoy strong spillover support from soybeans. Weakness in the U.S. dollar index is also encouraging of commodity buys.
- The market is also benefiting from concerns about heat and dryness in Argentina and southern Brazil, especially as recent weather model updates has scaled back coverage of the weekend precip event.
- Ongoing weak export demand continues to keep bullish enthusiasm in check. However, recent improvement in Gulf basis could signal some improvement is ahead. Indeed, this week's export inspections tally was the highest in months.
- Also limiting gains was weekly ethanol production of 770,000 barrels per day for the week ended Jan. 25. This was the lowest tally since the start of these weekly releases in 2010 (the second such record in three weeks).
Soybean futures have continued to firm. Futures are now posting gains of 21 to 27 cents through the January 2014 contract, with nearbys leading gains.
- Support for soybean futures stems from heat and dryness in Argentina and southern Brazil with only scattered rain chances this weekend. The forecast also raises concerns about the potential for flooding in northern Brazil this weekend.
- Plus the market was again reminded of strong soy export demand. China bought another 175,000 MT of beans for 2013-14 this morning. The country has been a highly active buyer in recent weeks.
- This is expected to change once South American supplies hit the market in a few weeks, however.
- Early gains in soybean futures triggered buy stops as the market moved through key levels of support. A softer U.S. dollar index on disappointing GDP data for the U.S. is also encouraging technical buying.
Wheat futures have firmed slightly to trade mostly 4 to 6 cents higher at all three exchanges.
- Wheat futures are enjoying spillover support from corn and especially soybeans. A weaker U.S. dollar index is also encouraging light short-covering.
- Wheat is also benefiting from figures from the British farm ministry that showed Britain's wheat imports will likely rise 141% for 2012-13 to 2.19 MMT, due to poor production in the country, record consumption and expanding bioethanol needs.
- But buying enthusiasm is being curbed by a reminder Black Sea region production will likely recover in 2013-14 and by recent rains in the U.S. Southern Plains.
Live cattle futures remain narrowly mixed at midday. Feeder cattle futures have also softened to mixed trade, with nearbys favoring the upside.
- Cash cattle trade is getting started in Kansas at $125 -- up from last week. Futures are at a hefty premium to those cash prices, however.
- While packers continue to cut in the red and boxed beef prices have fallen this week, showlists are tight and the Midwest storm could tighten supplies even further.
- Plus, boxed beef movement surged this morning to 168 loads (just 2 loads short of yesterday's total). Choice cuts rose 17 cents, while Select values slid 7 cents.
- Expectations Friday's semiannual Cattle Inventory Report will show both all cattle & calves and the annual calf crop below year-ago is also limiting selling interest.
- Strength in the corn market is a limiting factor for feeder cattle futures.
Lean hog futures are enjoying slight gains in most contracts at midday.
- Blowing snow in the Midwest is expected to disrupt hog transportation today. Plus, market-ready hog supplies are tightening due to seasonal production patterns and colder temps.
- Nevertheless, cash hog bids are steady to lower today as packers are working to turn profit margins positive.
- Margins have recently improved to near steady, thanks in part to yesterday's 95-cent gain in the pork cutout value. Movement was also strong at 115 loads.
- The front-month contract is also benefiting from efforts to keep it in line with the cash hog index, which was most recently projected 12 cents lower to $88.30.