Corn futures have softened sharply to post double-digit losses.
- While recent results from the Pro Farmer Midwest Crop Tour have been disappointing, they do represent an improvement over Day 1 findings. This plus ideas high prices are destroying demand has resulted in profit-taking.
- Weekly export sales of 108,400 metric tons (MT) for 2011-12 and 217,000 MT for 2012-13 met expectations, but the overall tally still points to slowed demand.
- Meanwhile, the 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 have reversed early gains to trade double-digit lower in nearby contracts; deferred months are favoring the downside in mixed trade.
- Early gains sparked by fresh demand news and tight supplies gave way to profit-taking.
- Weekly export sales of 132,900 MT for 2011-12 and 585,800 MT for 2012-13 topped expectations, with China as 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;
- USDA also announced daily sales of 55,000 MT of soyoil to China, with 36,000 MT for 2011-12 and 19,000 MT for 2012-13.
- These signs that lofty prices have yet to slow use will continue to limit the market’s downside risk.
Wheat futures have softened to post double-digit losses at all three exchanges.
- Wheat softened along with corn as still-ample U.S. wheat supplies render it unable to rally on its own merits.
- Plus, the forecast holds chances for significant rainfall in the Central and Southern Plains, which improves winter wheat planting prospects.
- 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.
- Weekly wheat export sales of 468,800 MT for 2012-13 and 6,000 MT for 2013-14 were within expectations.
Live cattle futures have improved to choppy trade. Feeders cattle futures are moderately to sharply higher.
- Traders are still waiting for cash cattle trade to get underway after light sales at lower prices in Nebraska yesterday. Tighter showlist estimates have most expecting at least steady trade compared to last week’s $120 to $121.
- Encouraging some light short-covering were gains in Choice (21 cents) and Select (34 cents) boxed beef values this morning. Movement was also decent at 98 loads.
- Outside markets are a mixed bag with the dollar lower along with the stock market after disappointing jobs and manufacturing data for the U.S.
- Feeder cattle futures are benefiting from softer corn prices.
Lean hog futures have improved to choppy trade.
- Lean hog futures are benefiting from some light short-covering as traders work to improve the market’s oversold condition.
- But that is the extent of buying interest as supplies continue to build and recent steep declines in the pork market signal demand is lagging production.
- As a result, cash hog bids are lower today.
- Pressure is being limited by yesterday’s Cold Storage Report, which showed pork stocks below traders’ expectations but still 20% above year-ago.
