Corn futures are called fractionally to 1 cent firmer on light followthrough buying. Futures enjoyed followthrough from yesterday's recovery as traders were encouraged by the market's ability to avoid falling through important support levels on Tuesday. But buying overnight was limited by a firmer tone in the U.S. dollar index. Some light support also came from expectations that projections out of USDA's outlook forum later this week will remind of the likelihood for fewer planted corn acres this spring. Still, traders are impressed by a steady stream of export demand news and signals USDA's current export forecast is too light. However, USDA this morning reported the cancellation of an optional origin sale of 136,000 MT to South Korea for 2016-17.
Soybean futures are called 1 to 3 cents higher amid short-covering. Futures benefited from light short-covering overnight following three straight days of price losses. But a firmer tone in the dollar and light pressure on crude oil futures limited buying overnight. While Brazil's soybean harvest is expected to gain momentum this week, traders note that U.S. supplies remain price competitive, which keeps the export window open. China's Dalian soybean futures were lower overnight, but Malaysian palm oil futures favored a firmer tone.
Wheat is called 1 to 3 cents higher amid short-covering. Wheat enjoyed light spillover from corn and soybeans as well as short-covering following recent losses. Traders are also digesting news that India's government may consider reinstating its wheat import duty due to expectations for a record crop. Also this morning, the head of Russia's grain union says a rise in its currency poses a risk to spring wheat acres. Traders are also waiting on results from an Egyptian wheat tender. It received offers from Ukraine, Russia and France.
Cattle futures are called to steady to firmer on cash optimism. Cattle futures are expected to enjoy followthrough from yesterday's gains as traders are cautiously optimistic about this week's cash market prospects. This week's showlist is tighter than last week and beef movement has improved so far this week. As a result, traders expect at least $1 higher cash trade compared with the average of last week's cash trade, which according to USDA was $119.59. Traders will monitor the midmorning online cattle auction for guidance. Choice beef values firmed 90 cents yesterday and Select declined 59 cents to widen its discount to Choice to $2.00. Movement was solid at 142 loads.
Lean hog futures are called mixed amid position squaring. Futures are expected to see a combination of light followthrough selling after yesterday's slight losses and short-covering on spillover from cattle. The discount nearby futures hold to the cash index should be supportive this morning, although tighter packer margins have some looking for a cash top soon. Pork cutout values softened 53 cents yesterday due to a $6.12 plunge in bellies. Movement improved to 378.71 loads. For the week ended Feb. 18, average hog weights in the Iowa/southern Minnesota market rose by 0.7 lbs. from the previous week, which is not alarming considering marketings were disrupted by "Day Without Immigrants" protests last week. Weights are 3.3 lbs. lower than year-ago.
ICE cotton futures edged upward Tuesday, with the expiring March contract seeming to find major support at tis 40-day moving average and leading the deferred contracts upward in a modest rebound. Yesterday’s U.S. dollar strength probably limited the rise, but the fact that futures proved able to advance in that situation was rather impressive. One has to suspect having the equity indexes march up to fresh records encouraged bulls expecting stronger U.S. and global economic growth and, as a consequence, improving global apparel and cotton demand. The rise persisted overnight, with the March future leaping upward and seemingly inspiring more modest gains in the deferred contracts. One has to suspect the price differentials reflect active short position rolling from March into the deferred contracts. Most-active May cotton futures rallied 0.29 cents to 75.95 cents/pound in early Wednesday action, while the July contract advanced 0.29 cents to 77.00.