Corn futures remain choppy with nearby contracts slightly higher and deferred months slightly lower.
- Nearby corn futures are benefiting from light, corrective short-covering on ideas the downside has been overdone and spillover support from soybeans.
- Otherwise, fresh fundamental news is lacking. This will keep near-term action choppy.
- While steady Gulf basis levels point to tight supplies, the fact that they are not rising also signals demand is lacking.
- Outside markets also provide little direction. The U.S. dollar index has been choppy, the stock market is under pressure and crude oil futures are firmer.
Soybean futures are 4 to 13 cents higher in most contracts.
- Fresh demand news and ideas the downside has been overdone are giving bulls the upper hand today.
- USDA this morning announced a 120,000 MT soybean sale to China for 2012-13. It also announced a 40,000-MT soyoil sale to unknown destinations (China?) for 2012-13.
- Also today, NOPA soybean crush for October of 153.536 million bu. topped expectations by more than 9 million bu. and represented a 28.2% increase from September and an 8.8% increase over last year. Meal exports rose 116% compared to the previous month and 41.8% over year-ago.
- But improved weather in Brazil, that increases the likelihood of a record-large South American bean crop, continues to limit buying interest.
Wheat futures have rebounded to post gains of 1 to 3 cents in Chicago and 4 to 6 cents in Kansas City and Minneapolis.
- Wheat futures are benefiting from concerns about ongoing deterioration of the winter wheat crop with little drought relief in sight.
- Yesterday, USDA showed the proportion of wheat rated "good" to "excellent" declined 3 percentage points to 36%. The amount of wheat rated "poor" to "very poor" increased by the same amount to 22%.
- Tightening stocks in the Black Sea region and Australia are still expected to give U.S. wheat a boost on the export market.
- Uncertainty persists about whether Ukraine will officially cap its exports at 5.5 MMT, as earlier indicated, but regardless, the market expects Ukrainian wheat exports to slow.
- France AgriMer projects the country will produce 35.8 MMT of soft wheat in 2012-13, which compares to 33.69 MMT last year. This is limiting gains.
Live cattle futures continue to post slight losses in all but the front month, which is slightly higher. Feeder cattle futures are slightly to moderately lower.
- Live cattle futures are being pressured by expectations cash cattle trade will take place at lower prices as packers are cutting in the red, beef demand is expected to slow ahead of Thanksgiving and near-term supplies are ample for what will be a holiday-shortened week.
- Plus, boxed beef prices faltered this morning. Choice cuts slid 29 cents while Select cuts firmed 8 cents. Movement soared to 154 loads, however.
- But downside risk is limited as retailers will soon begin stocking up for the Christmas holiday season and consumers on the East Coast are beginning to restock meat supplies.
- Traders are also readying for Friday's Cattle on Feed Report, which is expected to show On Feed at 94.6%, Placements at 87.3% and Marketings at 102.6% of year-ago levels.
- Gains in the corn market are encouraging profit-taking in feeder cattle futures.
Lean hog futures continue to trade slightly to moderately lower.
- After a sharp decline in the pork cutout market yesterday, traders are engaging in some light profit-taking as the market is reading this as a sign pork demand is losing out to poultry demand. But pork movement remains strong. Thirty loads have already changed hands this morning.
- This is keeping cash hog bids steady to lower today. There are ample supplies and packers are buying for a holiday-shortened week.
- But wide profit margins for packers and the seasonal tendency for supplies to tighten the first quarter of the year is limiting selling interest, too.