Corn futures have firmed following the release of USDA's Supply & Demand Report to trade 6 to 10 cents higher in old-crop corn and 4 to 5 cents higher in new-crop corn.
- USDA's Supply & Demand Report revealed 2012-13 carryover at tighter-than-expected levels, as USDA left its peg at 632 million bu., whereas the market had expected USDA to raise its estimate by 17 million bushels.
- USDA lowered its global carryover estimate by 560,000 MT from last month to 117.48 MMT. This is well below 131.16 MMT in 2011-12.
- Firmer Gulf basis levels for immediate delivery this morning also reminded of tight old-crop supplies. Basis was steady at midday.
- But buying interest in new-crop corn is limited as 2013-14 production is expected to rebound, especially if the Midwest continues to receive beneficial precip.
- Strength in the U.S. dollar index following better-than-expected non-farm payrolls is limiting gains.
Soybean softened following the release of USDA's reports to trade 9 to 12 cents lower in new-crop beans, while old-crop is seeing lighter losses. March beans are slightly higher.
- Traders were disappointed that USDA left its 2012-13 carryover estimate unchanged at 125 million bushels. Considering recent strong daily and weekly export sales tallies, traders had been expecting USDA to raise its export forecast.
- This also signals USDA anticipates a major slowdown in U.S. soy demand as South American supplies become available.
- USDA's South American production pegs came in about as expected at 83.5 MMT for Brazil and 51.5 MMT for Argentina.
- Chinese soybean imports slowed to 2.9 MMT in February, which was down 39.3% from January and 24.3% below year-ago. But shipping delays out of Brazil has caused Chinese crushers to rely on U.S. beans to fill near-term needs.
- Expectations for a rebound in 2013-14 production and dollar strength are helping new-crop beans to lead losses today.
Wheat futures have softened a touch ahead of midday to trade mostly 3 to 6 cents lower at all three locations.
- This morning's Supply & Demand Report showed USDA raising wheat 2012-13 carryover slightly more than expected to 716 million bu., compared to 691 million bu. in February.
- USDA also raised its global carryover peg slightly from last month to 178.23 MMT.
- This along with sharp gains in the U.S. dollar index is encouraging light profit-taking in wheat ahead of the weekend.
- Pressure is being limited by recent signs U.S. wheat prices are competitive globally, and persistent drought on the Southern Plains.
Live cattle futures have softened to post moderate losses. Feeder cattle futures are moderately to sharply lower.
- Traders are reduing risk in the cattle market amid beef demand concerns that have been heightened by a surge in the U.S. dollar index today.
- While boxed beef prices have staged an impressive rally this week, movement has been lackluster. This morning, Choice cuts firmed 82 cents and Select cuts rose a penny. Movement was again light at 83 loads.
- Adding to such concerns, USDA in its Supply & Demand Report today raised its 2013 beef production estimate by 15 million lbs. from February and lowered its export projection by 10 million lbs. from last month.
- USDA's reminder of tight corn supplies and relatively high average on-farm cash corn prices is pressuring feeder cattle futures, as is dollar strength.
Lean hog futures continue to post slight losses ahead of midday.
- Traders are booking light profits ahead of the weekend after the lean hog market posted impressive technically supported gains.
- Concerns about both the product and cash markets are adding light pressure.
- The pork cutout value fell again yesterday, bringing it to its lowest level since late September. Movement has been solid however.
- Recent declines have eroded packer cutting margins and diminished their demand for cash hogs. Thus, bids are mostly steady to lower today.
- Also, in today's balance sheet adjustment, USDA cut its export forecast by 90 million lbs., though it also lowered its 2013 pork production forecast by 50 million pounds.
- But losses are being limited by expectations for the pork market to soon put in a low as Easter ham buying picks up and spring grilling season nears.