Corn futures continue to post losses of roughly 3 to 7 cents at midday.
- Traders continue to view the weather as positive for corn planting and thus are not concerned about the showers moving into the western Corn Belt currently. A favorable weather outlook has traders looking past the near-term showers.
- China has announced it will raise the state-set purchasing price for corn to encourage farmers to plant more acres to corn. Traders view an increase in China planted acreage as bearish to potential purchases from the U.S.
- Ethanol production fell 1.6% last week to 843,000 barrels per day. Ethanol stocks also fell 200,000 barrels to 16.8 million barrels last week -- the lowest level since late 2011.
- Traders expect USDA to trim its old-crop carryover estimate by 3 million bu. from last month to 754 million bu. in its May Supply & Demand Report due out Friday. The trade looks for new-crop carryover at 1.973 billion bushels.
- Gulf basis is unchanged for May through August delivery a penny higher for September delivery mid-morning.
Soybean futures have backed off from their double-digit gains in old-crop contracts (except the soon-to-expire May contract), with the July contract up 5 cents. New-crop is mostly 3 to 6 cents lower.
- News from Reuters that Paraguayan and Brazilian soybeans are set to be shipped to the United States is pressuring prices. The report indicates three ships may be headed to the U.S.
- New-crop contracts are receiving support from easing worries about a large shift of corn acres to soybeans due to delayed planting.
- The market is also benefiting from ongoing signs of solid export demand for a small supply of soybeans. Traders expect USDA to trim its 2012-13 soybean carryover peg by 1 million bu. to 124 million bu. Friday.
- Also, USDA announced a 115,000 MT daily bean sale to China for 2013-14.
- The market expects USDA to project 2013-14 carryover to rebound to 239 million bu., which is limiting buying interest in new-crop futures.
- According to custom's data, China imported 3.98 MMT of soybeans in April, up 3.6% from March but 18.4% below year-ago.
Wheat futures are roughly 4 to 5 cents lower in Chicago while Kansas City and Minneapolis are seeing slightly lighter losses.
- Spillover from corn continues to weigh on the wheat market.
- The Northern Plains are expected to miss out on this week's precip event and mild conditions are currently in effect. Thus, traders expect advances in spring wheat planting.
- Rain is also falling in the Central Plains today, and more is expected for winter wheat country. This is pressuring the wheat market.
- The market is brushing off news UkrAgroConsult trimmed its 2013 Ukraine wheat crop forecast from 20.87 MMT to 20.16 MMT.
Live cattle futures are lower in 2013 contracts despite a surge to a record Choice boxed beef price. Feeder cattle are mostly moderately lower.
- Choice boxed beef values surged $3.26 this morning to a new record high of $204.45 wiping out the previous high of $201.68 posted Friday. Select values also firmed 62 cents and movement was solid at 111 loads.
- But traders remain worried that record-high prices beef will be resisted by consumers. They view the slippage in boxed beef prices and movement earlier this week as confirmation of their concerns.
- The strength in boxed beef prices may give feedlots an advantage in this week's cash negotiations. But countering this are heavier showlist estimates this week.
- Last week, cash trade took place at mostly $128 to $130, and some light sales took place at $126 in Texas and $127 in Iowa yesterday. Nearby futures are well below these prices.
- The same worries over beef demand and recent technical damage are pressuring feeder cattle futures.
Lean hog futures are enjoying slight to moderate gains.
- Lean hog futures are higher on unexpected strength in cash hog bids. That suggests supplies are tighter than thought and packers are not as well supplied as earlier thought.
- Average hog weights in Iowa and southern Minnesota fell 1.2 lbs. the week ended May 4.
- Performance in the pork cutout value recently has signaled a slowdown in purchases for Memorial Day.
- But this morning, movement surged to 307.4 loads after a 47-cent decline in the pork cutout value.
- Buying interest in nearby contracts is being limited by the roughly $2.50 premium they still hold to the cash hog index, though this has substantially narrowed in recent sessions.