Corn futures have strengthened to post gains of 5 to 7 cents in most contracts.
Futures are benefiting from USDA’s announcement that unknown destinations bought 217,424 metric tons (MT) of corn, 184,912 MT of which is for 2012-13.
Also today, FC Stone lowered its production estimate to 10.607 billion bushels.
Conab raised its 2011-12 export estimate for Brazil by 2 million MT (MMT) to 16 MMT. If realized, this would be an all-time high.
Argentina’s exchange raised its corn planted area estimate for the country by 300,000 hectares to 3.4 million hectares.
A South Korean feed miller purchased 124,000 MT of Brazilian corn, signaling global end-users are seeking cheaper supplies.
Soybean futures have softened to post losses of 2 to 9 cents.
Soybeans remain choppy as traders switch between profit-taking and bargain buying.
An upside revision to FC Stone’s crop production and yield estimates to 2.739 billion bu. and 36.7 bu. per acre, respectively, provide some profit-taking incentive.
Also, anticipation of harvest bringing supplies to market has caused basis levels to soften at interior and Gulf locations.
A big upside day in the stock market and softer dollar are limiting pressure. This action can be attributed to better-than-expected U.S. jobs data and the European Central Bank’s plans to embark on a bond-buying program.
Chicago and Kansas City wheat extended their rally to the upper teens to low 20s, while Minneapolis wheat is seeing lighter gains.
Wheat rallied around news Egypt bought 475,000 metric tons (MT) of wheat from Russia, Romania and Ukraine; 300,000 MT of this is for October shipment and 175,000 MT is for November shipment. These buys point to concern about tightening global supplies.
Such concerns were likely spurred by news 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.
This revived talk Russia will take similar action, though its deputy ag minister reiterated the country has no such plans.
Traders are ignoring news a South Korean feedmiller bought 124,000 MT of Brazilian corn at a discount to Indian wheat, which emphasizes high wheat prices.
Live cattle futures continue to post slight losses in most contracts, while feeder cattle futures remain choppy.
Traders are removing some of the premium live cattle futures hold to last week’s cash prices as they wait for cash cattle trade to begin this week.
A contra-seasonal rally in the boxed beef market has most expecting trade to take place above last week’s $122 to $123 on the Plains. This morning, Choice cuts rose $1.11 and Select cuts rose 77 cents. Movement was also impressive at 124 loads.
Gains in the corn market are limiting buying interest in feeder cattle futures, but downside risk is also limited by expectations harvest-related pressure will build going forward.
Lean hog futures have softened to post losses ranging from slight to sharp with nearby contracts leading to the downside.
Burdensome supplies are reflected by ongoing weakness in the cash hog and pork markets. Record-large hog slaughters have been unable to keep pace with expanding supplies. Cash hog bids are steady to lower today, despite strong packer profit margins.
Yesterday pork cutout values plunged, though this encouraged strong movement. Movement this morning was also strong at 27.5 loads.
The fact that traders have pulled nearby futures sharply lower signals they expect the cash hog market to continue its decline.
