Corn: Steady to 1 cent lower
Soybeans: 1 to 2 cents higher
Soybean futures favored the downside for much of the overnight session, but firmed late. As a result, we anticipate a slightly firmer start to daytime trade, though two-sided price action is possible. Argentine weather concerns remain supportive, as hot and dry weather will further stress crops this week. South American Crop Consultant Dr. Michael Cordonnier lowered his Argentine soybean crop estimate by 1 MMT to 50 MMT. His Brazilian crop estimate is unchanged this week at 112 MMT.
Corn futures faced light pressure overnight following Monday’s gains. While there are crop concerns in Argentina and Brazil, corn traders have been relatively slow to factor in crop losses and content to keep the market in a follower’s role. Cordonnier cut his Brazilian corn crop estimate by 2 MMT to 86 MMT and lowered his Argentine corn crop peg by 1 MMT to 38 MMT.
Wheat futures were narrowly mixed overnight. We anticipate similar price action to start daytime trade. Traders are watching a precip event for the middle of this week, which could bring some relief to dry areas of the Central and Southern Plains, though it’s not expected to be a drought breaker by any means.
Live cattle futures posted moderate to strong gains Monday and finished high-range, which should lead to followthrough buying today. While traders are still forming cash cattle opinions for the week, wholesale beef trade was strong Monday, as prices were sharply higher and movement was decent. However, it is unlikely traders will push February futures too far in front of last week’s $126.15 average cash price in the Plains until they have a better feel for this week’s likely cash trade. That could lead to two-sided trade today.
February lean hog futures are trading $1.645 below where the cash index will be quoted today (for Feb. 9). That should at a minimum limit selling in the lead contract. Deferred futures posted strong gains yesterday, with the April contract marking a bullish reversal and high-range close. That should lead to followthrough buying in deferred hog futures. The cash hog market was mildly lower Monday and a steady/weaker tone is expected again this morning.