Corn futures have slipped back into negative territory and are posting losses of 1 to 5 cents in most contracts.
- Spillover from the wheat market and concerns about unrest in Ukraine initially lifted the corn market, but traders have since shifted to reducing long exposure to the market ahead of a referendum in Crimea this weekend.
- But strong demand for U.S. corn and the possibility for increased business due to political unrest in the Black Sea region will limit selling interest to profit-taking.
- Light pressure stems from news China's state corn stockpile for 2013-14 is expected to reach a record-high of 60 MMT by the end of April, possibly due to reduced feed demand stemming from bird flu, according to China National Grain and Oils Information Center. The nation plans to end its stockpiling program this year.
Soybean futures have softened to post losses of 5 to 13 cents this morning.
- Traders are booking profits ahead of the weekend today. The market saw major chart damage this week, and uncertainty regarding Chinese soybean demand is encouraging some risk reduction.
- China canceled shipments of South American bean supplies this week, spurring talk that bird flu is having more of an influence on feed demand than earlier thought.
- Traders are brushing off news a grounded ship carrying soybeans is blocking the main waterway at Argentina's top grain port. South American shipping issues are no surprise.
- Similarly, traders are not yet overly concerned about a one-day work stoppage by unionized dockworkers pushing for higher wages. They say they will start a strike March 25 if wage talks do not start by then.
- Traders expect the National Oilseed Processors Association's monthly crush update Monday to show soybean crush around 140.9 million bu. in February, which would be down 10% from the month prior but still the highest level in four years.
Wheat futures have pared early gains, with the SRW market mostly 7 to 10 cents higher, HRW 8 to 14 cents higher and HRS up 6 to 11 cents.
- Mild profit-taking followed the wheat market's surge higher. Spillover from corn and soybeans also tempered gains. But bulls maintain control of the market.
- Traders remain focused on evening positions ahead of the weekend referendum in Crimea on a proposal to join Russia. Such a move is expected to further inflame political tensions. Traders believe this could eventually boost demand for U.S. wheat.
- Ukraine grain stocks stand at 16.2 MMT as of March 1, which is up 23% from year-ago, according to the State Statistics Service. The country still plans to export 33 MMT in 2013-14.
- Talk of drought across the Southern and Central Plains continues to provide support.
- A weaker U.S. dollar index is also supportive as this increases the competitiveness of U.S. wheat on the global export front.
Live cattle futures have extended early gains to trade slightly to sharply higher, with the front-month leading gains. Feeder cattle futures are moderately to sharply higher.
- Cash cattle trade has largely taken place at $148 on the Southern Plains (steady with week ago), with a few sales at $148.50. So far, just light trade has taken place in northern locations at steady prices.
- Futures are well below these cash prices, giving traders incentive to push futures higher heading into the weekend.
- On the other hand, the boxed beef market is signaling a top may be in place. This morning, Choice and Select prices slipped 67 cents and 8 cents, respectively. Movement slowed notably to 48 loads. But prices are still just shy of all-time highs.
- Feeder cattle futures extended early gains on a pullback in the corn market.
- A weaker U.S. dollar index is also supportive today.
April lean hogs have moved back into positive territory, but the rest of the market remains slightly to moderately lower.
- Traders are not convinced the run-up in April lean hogs is complete. Thus, early losses have given way to some light "bargain" buying. The rest of the market is seeing profit-taking ahead of the weekend.
- While the fundamentals still favor market bulls, lean hog futures are technically overbought, signaling a time or price correction is possible at any time. Plus, gains in the cash hog index have been matched by futures, keeping the front-month around $10 above the index.
- The pork cutout value firmed 50 cents this morning, but movement slowed to 125.29 loads. Strong gains in the beef market has lifted pork, as it is "cheap" relative to beef.
- Profitable packer margins have made them willing to pay up for supplies throughout the week. Supplies are tightening seasonally and due to the porcine epidemic diarrhea virus (PEDV). This trend is expected to continue over the next few months.
- Pressure is being limited by spillover from the cattle market and a weaker U.S. dollar index.