Corn futures continue to enjoy gains of roughly 10 to 11 cents in old-crop contracts, with new-crop futures 2 to 5 cents higher.
- Traders are covering short positions in reaction to heavy precip in the upper Midwest today, including snow. This will result in additional planting delays and further raises the likelihood some corn acres will shift to soybeans.
- Also, this morning's Weekly Export Sales of 329,300 MT for 2012-13 and 656,000 MT for 2013-14 were impressive and came in near the upper end of expectations. China was the lead buyer of new-crop corn.
- Gulf basis was steady to a penny higher this morning and steady at midday, signaling lackluster demand may be improving somewhat and/or reflect tight supplies.
Soybean futures remain choppy at midday with old-crop steady to 5 cents higher and new-crop around 2 cents lower.
- Traders are engaging in some bull spreading activity today on concerns about tight old-crop supplies and expectations for larger soybean plantings due to corn planting delays.
- The Weekly Export Sales Report showed net sales reductions of 109,800 MT for 2012-13 but sales in excess of 1.341 MMT for 2013-14. This signals some switching of old-crop bean orders to new-crop.
- Adding to the still-strong demand picture is USDA's announcement of a daily new-crop soybean sale to China for 290,000 MT today for 2013-14.
- On the other hand, more disappointing manufacturing data out of China today raises concerns about a slowdown in feed demand from the country.
Wheat futures remain roughly 3 to 4 cents higher in Chicago and 5 to 10 cents higher in Minneapolis. Kansas City wheat has improved to trade mostly 3 to 4 cents higher.
- Minneapolis wheat is the upside leader today thanks to a winter storm event in the Northern Plains overnight that will further delay already slow spring wheat planting.
- Other locations are benefiting from day two results of the Wheat Quality Council's HRW wheat tour through western and southern Kansas and far northern Oklahoma. Scouts pegged the average yield for the area at 37.1 bu. per acre, compared to 43.7 bu. per acre last year and 39.5 bu. per acre for the five-year average.
- More deterioration to the winter wheat crop may be ahead as freeze warnings are in effect as far south as the Southern Plains tomorrow.
- Support also comes from a reminder of recently improved wheat demand. Weekly wheat export sales of 219,200 MT for 2012-13 and 497,300 MT for 2013-14 topped expectations by a wide margin.
- But strength in the U.S. dollar index is keeping bullish enthusiasm in check.
Live cattle futures are moderately higher in most contracts. Feeder cattle futures are enjoying moderate to sharp gains.
- Highly impressive gains in Choice boxed beef prices this week are lifting live cattle.
- This morning, Choice cuts rose another 81 cents to $200.30, which is just 88 cents short of the all-time high from October 2003. Select cuts also rose $1.15, though movement slowed to 75 loads.
- But slower movement does raise concerns about the sustainability of high prices.
- Moderate cash cattle trade took place yesterday at mostly $128 in Texas and Kansas yesterday with a few sales at $129 in Kansas -- mostly steady with the week prior. Sales in northern locations took place at $130 to $131 -- steady to up $1 from last week.
- The beef surge has drawn some packer profit margins into the black. This could increase their willingness to pay up for additional supplies.
- Buying interest is being tempered by marked strength in the U.S. dollar index today.
Lean hog futures remain narrowly mixed at midday.
- The pork market continues to signal a seasonal grilling rally is underway and the cash hog market is steady to higher again today, but traders are taking advantage of a sharply higher U.S. dollar index to book some profits today.
- The pork cutout value fell $2.42 this morning, but movement was solid at 226.9 loads.
- Supplies are tightening seasonally and the storm across the upper Midwest is disrupting transportation. Thus, packers are paying steady to higher prices for market ready hogs today despite negative cutting margins.
- Light pressure stems from a disappointing weekly pork export sales tally of 8,000 MT.
- Buying interest in the front-month contract is being limited by the nearly $6 premium it holds to the cash hog index.