Corn futures are called marginally to 1 cent firmer on followthrough. Corn futures started the overnight session under light pressure but firmed on spillover from soybeans and wheat. Strength in the U.S. dollar index this morning is a limiting factor for the commodity markets, however. Bulls' next target for May corn is last week's high of $3.72, which aligns with the 100-day moving average. Traders are also encouraged by the recent uptick in demand as reflected by a five-week-long string of weekly export sales tallies topping 1 MMT.
Soybean futures are called 3 to 4 cents higher on followthrough. Soybean futures ended the overnight session mostly around 4 cents higher on followthrough from yesterday's gains. May soybeans posted a new-for-the-move high overnight, moving above the 200-day moving average near $9.04. Soybeans continue to be supported by political turmoil in Brazil that has improved the relationship of the U.S. dollar and the Brazilian real.
Wheat futures are called 1 to 4 cents higher on followthrough buying. Wheat futures were firmer overnight on followthrough from yesterday's gains and ongoing concerns about the winter wheat crop. Weekend temps dipped into teens to 20s in Kansas, Oklahoma and Texas for consecutive nights, raising concerns about freeze damage. State statisticians report 20% of the crop was joined in Kansas, while 38% of the Oklahoma crop was jointed and 2% was headed in Texas as of Sunday. Meanwhile, condition ratings improved slightly in Kansas and Texas, but slipped in Oklahoma due to building dryness. Strength in the U.S. dollar index limited overnight price strength.
Live and feeder cattle futures are called lower on weakening fundamentals. The combination of a bearish Cattle on Feed Report and weakening beef market weighed on cattle futures yesterday, with followthrough pressure expected this morning. Choice beef values fell $2.01 to start the week and Select declined $1.66 on light movement of 111 loads. This week's cattle showlist is up from last week, giving feedlots less bargaining power. This raises expectations for softer cash cattle trade compared with last week's $138 to $139 trade. Meanwhile, traders expect this afternoon's Cold Storage Report to show stocks declined slightly from the previous month. March feeder futures are trading at around a $1 discount to the cash index, which should limit followthrough pressure this morning.
Lean hog futures are called mixed. Lean hog futures are expected to see a choppy start on a combination of followthrough from yesterday's losses and short-covering. Pork cutout values firmed $1.02 to start the week, which is supportive for the market this morning. Packers moved 320.5 loads. The cash market is called mostly steady as packer demand is lighter this week as they prepare for some downtime around Easter. Traders are also preparing for this afternoon's Cold Storage Report that's expected to show pork stocks at the end of February up around 46 million lbs. from the previous month.
Cotton futures posted a huge surge Monday, due largely to aggressive short-covering. As pointed out yesterday morning, the latest Commitments of Traders report showed net short cotton positions held by trading funds at a record high, thereby implying they were overexposed to a reversal. That triggered early buying, which was later exaggerated by strength spilling over from rallying grain and soybean futures. Given the lack of fundamental reason for the move, as well as the May contract’s inability to challenge resistance associated with its 40-day moving average, prices set back overnight. May cotton tumbled 0.42 cents to 57.75 cents/pound early Tuesday morning, while the July contract fell 0.40 to 57.68.