Corn futures continue to enjoy gains around 5 to 6 cents in all but the March contract, which is 7 cents higher.
- May corn futures settled above the 50-day moving average and the $7.00 mark yesterday. Thus the contract is seeing some technical buying today.
- Other contracts are benefiting from recent improvement in Gulf basis levels and export sales tallies that point to improved export demand.
- In addition, sources say private Chinese feedmills have purchased around 600,000 MT of 2013-crop U.S. corn on the recent price drop, leading to calls for the government to issue more import quotas.
- Tight old-crop supplies are also encouraging of light short-covering, though ideas production will rebound in 2013-14 is keeping bullish enthusiasm in check.
Old-crop beans are 5 to 8 cents lower while new-crop beans have improved to mixed trade ahead of midday.
- Soybean traders are engaging in some bull spread unwinding ahead of midday.
- Plus, concerns are building that export demand for U.S. beans will soon fade as South American supplies come available.
- But long lines at Brazilian ports means the U.S. export window will likely remain open for a bit longer. Also indicative of this, Gulf basis levels firmed this morning.
- Tight old-crop bean supplies are also keeping basis levels elevated and downside risk for futures limited.
Wheat futures have improved slightly to trade 1 to 5 cents higher in Chicago and narrowly mixed in Kansas City and Minneapolis.
- Strength in the corn market is providing spillover support for Chicago wheat.
- But recent precip in winter wheat country has improved drought in the region and given the Kansas wheat crop a lift.
- But the region is still in need of rain and much more improvement is needed in the HRW wheat crop. State crop reports show that 44% of Texas' wheat crop is still rated "poor" to "very poor."
- Negative outside markets are also limiting buying interest.
- The European Union Commission released its short-term outlook, which reflected a 4.2% decline in 2012 wheat production to 123.2 MMT due to lower yields. But it expects 2013 wheat harvested acreage to be up 2.2% for the region.
Live cattle futures are posting slight to moderate gains in most contracts. Feeder cattle futures are moderately higher.
- Traders are cautiously covering short positions as they form cash cattle opinions.
- Choice boxed beef values firmed 77 cents and Select cuts firmed $1.13 this morning. This was a new nominal high for Select values, as supplies of this leaner cut of meat have tightened. Higher prices slowed movement to 54 loads, however.
- Showlist estimates are steady with week-ago levels.
- This plus now-positive packer profit margins could encourage packers to pay up for supplies this week. Thus, April live cattle are up $1 from last week's mostly $128 trade.
- Spillover from live cattle and a weaker U.S. dollar index are encouraging short-covering in feeder cattle futures.
Lean hog futures have extended early gains to trade slightly to moderately higher.
- A few unexpected higher cash hog bids have given futures a slight boost. Most packers are paying steady prices amid limited demand, however.
- Also, traders were encouraged by a 69-cent gain in the pork cutout value yesterday, though this slowed movement to a dismal 24 loads. Already this morning, however, 20.5 loads have changed hands.
- This adds to hopes the pork market is working on a low as Easter and spring grilling buying gives the product market a lift.