Corn futures are generally 4 to 5 cents higher through the December 2014 contract.
- Short-covering triggered by a surge in country basis levels continues to lift futures today.
- Gains are tempered by strong gains in the U.S. dollar index.
- Traders anticipate a large supply of corn will eventually move to the market, but tight carryover supplies and a lack of farmer selling prompted basis levels in the interior to firm overnight, with some locations raising basis by 12 cents. This reflects the carryover impact of the tight 2012-crop and delayed 2013-crop harvest as traders thought supplies would be available by now.
- The flow of grain to town is being hampered today as rain moves across the Corn Belt, slowing harvest activity.
- A Reuters poll of analysts pegs harvest around 31% complete as of Sunday, which reflects the delayed nature of this year's harvest. But it also means harvest-related hedge pressure still lies ahead.
- Limiting gains are continued reports of better-than-expected yields.
- Futures are shrugging off today's weekly export inspections data, which came in below expectations at 21.733 million bu. for export the week ended Oct. 10. This compares to 25.336 million bu. the previous week.
Soybean futures are narrowly mixed amid bear spreading, with November through July contracts fractionally to 5 cents lower and far deferred months slightly higher.
- Harvest-pressure is the major negative for futures this morning, although rains in the Corn Belt are slowing field work
- Strength in the U.S. dollar index is also providing pressure.
- A Reuters poll of analysts shows the market believes soybean harvest has reached the 45% completed mark, which has some traders thinking harvest-related hedge pressure may begin to fade soon.
- Pressure also stems from reports favorable weather in Brazil is helping seeding to pick up.
- Today's soybean crush figures are adding some pressure. The National Oilseed Processors Association lists September crush at 108.68 million bu., down from August's 110.5 bu. and last year's 119.7 million bu. But the figure is higher than pre-report estimates of 106.4 million bushels.
- But countering this is today's Weekly Exports Inspections Report that shows 47.381 million bu. being inspected by USDA. That compares to 30.66 million bu. inspected last week and is well above expectations, signaling low prices are indeed stimulating buyer interest.
Wheat futures of seeing losses of 2 to 4 cents for all three flavors, with front-month contracts leading to the decline.
- The stronger U.S. dollar index is encouraging profit-taking in the wheat market.
- Adding to the negative tone and concerns about whether U.S. wheat is competitively priced is today's weekly export inspections figure of 25.287 million bushels. It is down from last week's 29.781 million bu. and is below expectations.
- News of drought lowering production potential in China's top growing region is offering some support as is news Ukraine reportedly has seeded just 76% of its intended winter wheat area.
- News India may cut its floor price for wheat exports by 13% to boost shipments adds light pressure.
- The market is shrugging off the short-covering rally in corn as traders know the bulk of the corn harvest is still ahead.
- The market is ignoring reports some HRW wheat replanting may be necessary after heavy rains last week on the Southern Plains washed out some acres.
Live cattle futures are slightly to moderately lower, with October futures down 70 cents. Feeder cattle futures are moderately to sharply lower.
- Profit-taking is the main feature in live cattle futures as well as a surge in delivery notices.
- Strength in the U.S. dollar index is also seen as negative.
- Limiting selling, however, are early indications are for higher cash cattle trade again this week compared with last week's $128 action on the Southern Plains.
- Showlist estimates are down in Nebraska, Kansas and Texas this week, but negotiations will be protracted as packer margins are negative.
- Also, Urner Barry reports Choice and Select values surged to start the week.
- Profit-taking and strength in the corn market are weighing on feeder cattle futures as is fund liquidation.
December and February lean hogs are sharply higher, while deferred months are seeing slight to moderate gains.
- December hogs are posting the strongest gains as traders work to narrow the discount it holds to the newly expired October contract.
- Supplies are rising but packer margins are positive with the result being mixed cash prices.
- Urner Barry reports the pork cutout value firmed around 10 cents yesterday, which continues to confound the seasonal trend.
- Today's strength in the U.S. dollar index is limiting gains.