Bulls remain in control of the corn market, with old-crop 10 to 15 cents higher and new-crop up 6 to 7 cents.
- Corn futures are benefiting from both old- and new-crop demand news today.
- USDA announced a daily sale to China for 360,000 MT of new-crop corn this morning; an unknown destination also bought 180,000 MT of new-crop corn.
- Also, ethanol production rose 18,000 barrels per day (bpd) over the past week to 875,000 bpd -- the highest weekly output since June 22, 2012. Ethanol stocks declined 247,000 barrels to 16.18 million barrels last week.
- While growers made huge strides in terms of planting progress last week, 29% of the crop is left to be seeded and more rains in the forecast this week and the next will keep many farmers out of the field. This is again stirring ideas some acres may be switched to beans and raises concerns about yield-loss on any late-planted corn.
Soybean futures have backed well off early gains to trade around 3 cents higher in old-crop contracts, while new-crop are up 11 to 12 cents.
- Spillover from corn is keeping old-crop soybeans in positive territory. New-crop futures are benefiting from some bull spread unwinding.
- But buying interest is largely limited to short-covering as basis levels have softened this week on an increase in farmer selling.
- Also, any corn planting delays due to recent and expected wet weather could result in some acres being switched to soybeans.
- China National Grain and Oils Information Center says the country has canceled up to 150,000 MT of South American soyoil purchases due cheaper prices for domestic supplies. But the market is not overly concerned about this as overall soy demand from the country is expected to remain solid.
Wheat futures in Chicago and Kansas City remain 9 to 10 cents higher, while Minneapolis is mostly 3 to 5 cents higher.
- Wheat is in a follower's role to corn today, which is encouraging some corrective short-covering.
- Ongoing deterioration of the HRW wheat crop is an underlying source of support, though expectations for world supplies to build in 2013 means it is not yet enough to encourage active buying.
- Spring wheat planting delays continue as soil in the Northern Plains remain too wet for planting. Plus the NWS 6- to 10-day forecast calls for above-normal precip in this region.
- But a pickup in planting of spring wheat on the Canadian Prairies is limiting buying in Minneapolis wheat futures.
Live cattle futures have extended losses to trade slightly to moderately lower in all but the December contract, which is slightly higher. Feeder cattle futures are moderately lower in most contracts.
- The U.S. dollar index has firmed, increasing profit-taking pressure in cattle futures.
- Meanwhile, the disconnect between the beef market and futures continues. Choice boxed beef values have hit numerous all-time highs in recent weeks, but traders are more focused on expectations high prices will slow demand.
- This morning, Choice values continued their charge higher, rising 38 cents to $211.04. Select cuts fell 18 cents, widening the spread between the cuts to $18.25. More impressive, however, was improved movement of 122 loads.
- Beef strength and wide packer profit margins has most expecting cash cattle trade to take place at steady to higher prices compared to trade at mostly $125 on the Plains last week.
- But the fact that packers are preparing for a holiday-shortened kill schedule and the big discount futures hold to last week's cash prices adds some uncertainty.
- Strength in the corn market and concerns about the poor state of pastures is pressuring feeder cattle futures.
Lean hog futures are moderately to slightly higher with nearbys leading gains.
- The lean hog market continues to benefit from strength in the pork market.
- This morning, the pork cutout value firmed 62 cents, but even more impressive was surge in movement to 269.8 loads. This signals retailers may be gearing up to feature pork following Memorial Day.
- Meanwhile, the cash hog market is mostly steady today, as packers work to improve margins. Supplies are tightening seasonally, but packers are preparing for a holiday-shortened kill.
- Light support also comes from the slight discount June futures hold to the cash hog index.