Corn futures have seen a choppy morning of trade and are currently 1 to 2 cents higher.
- Weakness in the U.S. dollar is encouraging light buying, with traders awaiting the Federal Reserve's statement on the economy and its economic projections early this afternoon.
- Futures are also finding support from news that ethanol production last week rose by 12,000 bpd from the previous week to 809,000 bpd and stocks tightened.
- Traders are also starting to turn more attention to positioning ahead of next week's Prospective Plantings Report, as it will put more emphasis on new-crop potential.
- May corn futures are pivoting around $7.30 and December corn is pivoting around $5.60.
- Profit-taking at times has been spurred by weakening of Gulf basis for immediate delivery, although basis is still strong.
Soybean futures are 2 to 9 cents higher, with old-crop leading gains.
- Bull spreading continues to be the dominate trend in the soybean market, with old-crop futures playing "catch up" to recent gains in the corn market.
- However, a lack of fresh news is muting buying interest, especially given expectations South America's shipping season will soon hit full stride -- resulting in a softening of demand of U.S. soybeans.
- Export sources say China's Sunrise Group (which reportedly canceled 2 MMT of Brazilian soybean purchases) isn't the only group canceling purchases due to shipping delays.
- Traders are also beginning to look ahead to next week and are positioning for the Prospective Plantings Report. Traders expect a larger U.S. soybean crop this year to help cushion carryover.
- Soybean futures have a lot of work ahead in order to signal a near-term low has been posted as contracts are hovering above support levels.
Wheat futures are mostly 4 to 6 cents higher in Chicago, 6 to 7 cents higher in Kansas City and 3 to 5 cents firmer in Minneapolis.
- Wheat futures are being supported by short-covering with the corrective buying coming primarily from weakness in the U.S. dollar
- Additional support is coming from expectations tomorrow morning's weekly export sales data will reflect a pickup in export demand.
- Because of improved demand, traders are working to move May Chicago wheat futures in line with May corn futures.
- However, it will take a steady stream of demand news to spur sustained buying interest.
- Algeria bought 350,000 MT of optional origin wheat this morning, but the business is expected to go to France.
- May Chicago wheat futures are working on a solid upside day of trade on the daily chart and are pivoting around $7.30. A high-range close and followthrough buying tomorrow would signal a near-term low has been posted.
While feeder cattle futures remain sharply lower, live cattle futures are mixed, with nearby contracts firmer.
- Positive outside markets are encouraging some short-covering in nearby live cattle contracts, especially given the oversold condition of the market after futures slipped to fresh contract lows yesterday.
- But buying is being limited to short-covering as traders remain concerned about demand. Choice boxed beef values are down another $1.24 this morning and Select has softened 44 cents, but movement is better at 130 loads this morning.
- After light cash cattle trade in Texas and Nebraska yesterday at $124 to $125 (down $2 from last week), similar trade is being seen today, although movement so far is light.
- Selling interest is being limited by expectations Friday's Cattle on Feed Report will be bullish as feedlot numbers are expected to continue to tighten. Traders look for On Feed at 93.5%s, Placements at 91% and Marketings at 92.7% of year-ago.
- Feeder cattle are being pressured by technical selling and strength in the corn market.
Lean hog futures remain moderately lower this morning amid ongoing weakness in the cash hog market.
- Packer demand for cash hogs is light as they say they are not having any difficulty securing needed supplies. Cash bids are mostly steady, but some locations have dropped bids by 50 cents to $1 as they work to improve profit margins.
- Concerns about domestic and export demand are also lingering. Traders are concerned grilling season will start later than usual due to cooler temps across the upper half of the nation.
- April lean hog futures are trading at around a $1 premium to the cash index, which opens additional near-term downside risk for futures as traders have a negative bias toward the cash market.
- April lean hog futures gapped to a fresh contract low on the open and have been unable to fill the gap -- signaling bears clearly hold control of this market.