Corn futures are mostly 3 to 5 cents higher, although price action is choppy in far-deferred contracts.
- USDA announced corn sales of 217,424 metric tons (MT) to unknown destinations, which traders believe is likely China. Of the total, 184,912 MT is for 2012-13 and 32,512 MT is for 2013-14. This signals the market doesn’t have to drop much to find value buying amid tight global supplies.
- Brazil will export a record 16 million metric tons (MMT) of corn in 2011-12, the government said today, which is up 2 MMT from its previous estimate.
Outside markets are mostly are stronger this morning after the European Central Bank’s (ECB) announcement of a new bond-buying program that will focus on the secondary sovereign bond market. However, the U.S. dollar index has firmed after the announcement given the lack of details of the bond-buying program.
Soybean futures are 5 to 8 cents lower, but well off the earlier lows.
- Soybean futures saw followthrough pressure overnight, but have comewell off session lows after the ECB bond-buying announcement.
- Meanwhile, Gulf basis is steady to 2 cents weaker this morning, suggesting some price rationing and/or new-crop supplies hitting the market.
Wheat futures are mostly around 4 to 7 cents higher at all three exchanges.
- Wheat is seeing support from tightening supplies in the Black Sea region, which lifts expectations for improved demand for U.S. wheat.
- Ukraine’s government and exporters agreed yesterday to cap 2012-13 grain exports at 19.4 MMT, including 4 MMT of wheat. Trade sources expect the wheat tally to be reached by November.
- The ECB announcement is helping support wheat this morning.
Live cattle futures are expected to be choppy as traders wait on cash trade to begin.
- Traders are still waiting on cash cattle trade to begin, although most expect steady to $1 higher trade due to strength in the boxed beef market and tight market-ready supplies.
- Choice boxed beef values rose 69 cents yesterday and Select was up $1.14 on strong movement of 255 loads, reflecting a tightening supply situation.
- The ECB bond-buying program is supportive for outside markets and could help to lift cattle futures this morning.
Lean hog futures are called lower, pressured by plunging pork product prices.
- The pork cutout value plunged $2.57 yesterday, although movement was strong. But sharp pressure on the pork market signals supplies are burdensome.
- The cash hog market is expected to be mostly $1 lower today. Packers are still planning on a large Saturday kill, but will have no problem finding supplies.
- Pressure on nearby lean hog futures could be limited by the discount they already hold to the cash index.
