Corn futures continue to post slight losses in all but deferred months, which are mixed.
- Results from the Pro Farmer Midwest Crop Tour continue to disappoint, but today traders are evaluating how much of this is already factored into prices and what affect lofty prices will have on demand.
- The national average basis continues to firm, pointing to tight supplies.
- But while weekly export sales of 108,400 metric tons (MT) for 2011-12 and 217,000 MT for 2012-13 met expectations, the tally doesn’t come close to the strong demand seen earlier this year.
- Also limiting pressure is news International Grain Council (IGC) trimmed its 2012-13 global corn production estimate by 26 million metric tons (MMT) to 838 MMT, mainly due to a 25-MMT cut to the U.S. corn crop.
Soybean futures are enjoying gains ranging from around a penny to 8 cents.
- Pro Farmer Midwest Crop Tour results continue to fall well short of average plus the market has no shortage of fresh demand news today.
- Weekly export sales of 132,900 MT for 2011-12 and 585,800 MT for 2012-13 came in above expectations, with China the lead buyer for both marketing years. Soymeal export sales also topped expectations by a wide margin.
- Also this morning, USDA announced daily sales of 202,000 MT of soybeans to unknown destinations for 2012-13; 165,000 MT of soybeans to China for 2012-13; and sales of 55,000 MT of soyoil to China, with 36,000 MT for 2011-12 and 19,000 MT for 2012-13.
Wheat futures are enjoying slight gains in most contracts at all three locations.
- Wheat futures are enjoying spillover from soybeans as well as fresh supply news.
- Russia’s ag ministry today lowered its 2012 production estimate from a range of 75 million metric tons (MMT) to 80 MMT to 75 MMT.
- The IGC also lowered its global wheat production estimate by 3 MMT to 662 MMT, largely due to a 4-MMT cut to Russian production.
- Adding to global supply concerns, Home Grown Cereals Authority (HGCA) says the U.K.'s winter wheat crop will be of sub-par yields and quality.
- Weekly wheat export sales of 468,800 MT for 2012-13 and 6,000 MT for 2013-14 met expectations.
Live cattle futures are posting slight to moderate losses this morning. Feeders cattle futures are choppy.
- Some light cash cattle trade took place in Nebraska at slightly lower prices yesterday, but trade has yet to begin elsewhere. Tighter showlist estimates in Kansas and Texas have most expecting at least steady trade, but recent declines in beef prices add uncertainty.
- Outside markets are an additional source of pressure. The stock market is lower and the dollar is hovering around unchanged after the release of disappointing jobs and manufacturing data for the U.S.
- Weakness in the corn market has encouraged light short-covering in feeder cattle futures, but buying interest is limited as traders haven’t ruled out another move higher for corn.
Lean hog futures are slightly to moderately lower on followthrough selling.
- Pork cutout values plunged another $2.98 yesterday, which adds to concerns demand is lagging expanding supplies. Movement was decent at 77.63 loads, however.
- Cash hog bids are lower today as recent pork declines have cut into packer profit margins and packers are generally well supplied.
- Pressure is being limited by yesterday’s Cold Storage Report, which showed pork stocks below traders’ expectations but still 20% above year-ago.
- Also limiting selling is the market’s dip into technically oversold territory yesterday.
