Corn market lower at midday
Corn futures are lower at midsession, marking the third consecutive day of losses. Futures were down as much 11-12 cents in early trading, but have bounced back to trim losses to 5-6 cents. The selling pressure seems to stem from liquidation by the funds who added significantly to the long side in the previous reporting week. Weak export demand is also making traders anxious about holding positions through USDA’s supply and demand update on Tuesday. USDA is expected to boost ending stocks slightly based on a lower export projection. Weekly export inspections were poor again at only 9.9 million bushels. The March contract is 5 1/4 cents lower at $7.32. December 2013 is 4 3/4 cents lower at $6.33.
Soybean prices are mixed. Favorable South American weather and weakness in the other grains is pressuring 2012-crop contracts. Soybeans were steady on the overnight trade, but turned lower along with corn and wheat, trading 14 to nearly 20 cents lower. However, soybeans bounced back on strong export inspections at 46.6 million bushels. Argentina was mostly dry over the weekend while showers in Brazil aided the crop. More rain is forecast for Brazil this week. USDA is expected to cut soybean ending stocks slightly in Tuesday’s monthly supply and demand update. January soybeans are 5 1/2 cents lower at 14.66 3/4. The November 2013 contract is 3 3/4 cents higher 13.32 3/4. January meal is 40 cents lower at $442.50 and January soyoil is 25 points lower at 50.88.
Wheat futures are continuing to lose ground in midday trade. Weekly export inspections fell short of expectations, which only added new doubts to USDA’s current export forecast with sales to date running 220 million bu. behind where they “should” be based on 5-year history of sales to date vs. the marketing year total. Wire services say traders now share our view that average trade estimates ahead of Tuesday morning’s December WASDE report from USDA are likely understating the likely hike in U.S. wheat ending stocks. At midday, CBOT March is now down 13 cents at $8.47; KCBT March down 7 1/2 at $$9.02 and MGE March down 7 at $9.27.
Friday weakness in cash cattle and wholesale beef prices weighed upon CME live cattle futures in Monday morning trading. The drop was probably limited by weekend news that Russian officials had deferred a threat to halt imports of U.S. beef and pork over potential contamination with the growth promotant ractopamine. News of the potential stoppage had depressed the market last Friday. Forthcoming wholesale quotes, as well as reports concerning weekly feedlot showlists will likely affect prices this afternoon and later in the week. Feeder cattle rallied in response to sizeable corn losses. February live cattle futures were essentially unchanged at 130.42 cents/pound in late-morning trading, while the April future had slipped 0.30 cents to 134.17 cents/pound.
After dropping sharply late last week, CME lean hog futures came back somewhat Monday morning. Traders might easily be thinking the drop suffered last Thursday and Friday was overdone, especially if they expect the pork loin market to exhibit fresh strength through the balance of December. However, it seems too early for traders to think the traditional pre-Christmas ham price breakdown has run its course, which in turn may exert additional downward pressure upon the hog and pork complex later this week. February hogs rose 0.22 cents to 83.70 cents/pound, while the June contract rose just one tick to 98.22 cents/pound.
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