Corn futures have firmed to trade mostly 6 to 10 cents higher.
- USDA on Friday left its 2012-13 carryover estimate for corn unchanged at 632 million, whereas expectations were for it to increase its estimate by 17 million bushels. This reminder of tight supplies is encouraging short-covering in old-crop corn today.
- Plus, this morning's Weekly Export Inspections Report reminded the market that corn demand has recently improved a touch, though tallies are still very light relative to year-ago. For the week ended March 7, export inspections of 14.437 million bu. were near the upper end of expectations.
- The market is also seeing light support from USDA's export sales correction, which noted a bean sale reported last week included sales of 120,000 MT of new-crop corn to China.
- And while recent precip in the Midwest has improved soil moisture reserves, this also signals an early start to planting is unlikely.
Soybean futures have seen volatile trade today. March through July futures are mostly 3 to 5 cents higher while deferred contracts are narrowly mixed.
- Tight carryover supplies and recent strength in soybean export demand is supporting most old-crop soybean contracts.
- But as indicated by USDA's decision to leave its export forecast unchanged last Friday, demand is expected to slow notably in coming weeks as South American supplies come available.
- Perhaps signaling that this is beginning, export inspections for the week ended March 7 fell short of expectations and declined more than 23 MMT from the week prior to just 17.114 million bushels.
- On the other hand, Gulf basis levels jumped 4 cents this morning for immediate delivery, signaling tight supplies and possibly that more export news lies ahead.
- Recent precip in the Corn Belt and above-normal chances for precip in the extended forecast are encouraging some light profit-taking in new-crop beans.
Wheat futures have improved to trade roughly 3 to 7 cents higher in Chicago, while Kansas City and Minneapolis wheat are posting lighter gains.
- Wheat is benefiting from spillover from corn as well as signs U.S. wheat prices are attracting export business.
- This morning's weekly export inspections tally came in above expectations for wheat at 27.856 million bu., which is nearly a 3 million bu. increase from the week prior.
- But gains are being limited by rain over the weekend in the Central and Southern Plains with more in the 6- to 10-day forecast for the Central Plains.
Live cattle futures are back to choppy trade ahead of midday while feeder cattle futures are enjoying slight to moderate gains in most contracts.
- Recent boxed beef gains last week pulled packer profit margins into the black for the first time in six months. This has sparked ideas packers may increase their slaughter this week to take advantage of the positive margins.
- Light support also comes from news the U.S. ag attaché in Japan raised the forecast for Japanese beef consumption in 2013 by 5% from last year to 1.275 MMT. The attaché projects the U.S. will garner a larger share of this business from last year, though the attaché warns high U.S. beef prices could limit Japanese beef buys.
- Countering this, however, are concerns that lofty beef prices are curbing demand.
- This morning's unimpressive start to boxed beef trade adds to such concerns. Choice cuts slid 55 cents and Select values rose 44 cents on light movement of 64 loads.
- Feeder cattle futures are enjoying some corrective short-covering. Gains are being limited by strength in the corn market, however.
Lean hog futures are posting moderate to sharp losses ahead of midday.
- Traders are booking profits after last week's late recovery on indications the pork market has not yet put in a low.
- On Friday, the pork cutout value fell 75 cents and movement was again lackluster. This brought the pork prices to their lowest levels since September.
- This is limiting packer demand for cash hogs, though most are enjoying wide profit margins thanks to recent softer cash hog bids.
- Today, cash hog bids are steady to as much as $3 lower as most packers are well supplied for near-term needs, limiting the impact of poor road conditions in the upper Midwest.
- The fact that nearby futures are at a premium to the cash hog index is adding to the negative tone.
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