July corn is posting gains in the teens, while deferred months have softened to trade pennies to around 9 cents higher.
- Traders are again building weather premium into corn prices as rains falling in Iowa are spotty and there is little rain in the five-day forecast. Plus, heat is expected to build next week.
- The market expects worrisome conditions to result in another crop condition rating drop Monday -- though temps moderated this week, precip was largely absent.
- Firmer Gulf basis levels for July, October and November delivery are also supportive.
Soybeans futures continue to enjoy gains in the upper teens to low 20s.
- Beans are also being supported by weather concerns as the forecast for above-normal temps and light (at best) rain has yield-damaging implications. Trade expects USDA to reduce its current 40% "good" to "excellent" crop rating Monday.
- USDA announced a 150,200-metric ton (MT) soybean sale to unknown destinations, with 7,500 MT for 2011-12 and 142,700 MT for 2012-13. This reminds the market that soybean prices have yet to achieve the rationing needed to make supplies last.
- News Brazil's Agroconsult expects the country to produce a record 83.1 million MT of beans in 2012-13, due to an 11% increase in soybean acreage, could limit gains.
Wheat futures softened slightly along with corn to trade around 6 to 12 cents higher in most contracts.
- Wheat continues to enjoy spillover support from corn as well as friendly outside markets. The U.S. dollar index is under pressure and the stock market is enjoying strong gains thanks to Chinese GDP that met expectations.
- Crop concerns overseas, including Russia and Australia, remain underlying sources of support. The possibility of El Nino has heightened dryness concerns in Australia.
Live cattle futures are under moderate pressure this morning. Feeder cattle futures are again posting $2-plus losses.
- Cash cattle trade is likely complete after sales ranging from $114 to $115 on the Southern Plains yesterday, which is below last week's $117 trade and current futures prices.
- But as the premium futures hold to this week's cash prices is small considering tightening supplies and building heat, pressure is limited.
- Adding to the negative tone was another steep slide ($1.78) in Choice values along with a 24-cent fall in Select values yesterday. But this triggered strong movement.
- The ongoing rally in corn is again weighing heavily on feeder cattle futures.
Lean hog futures are posting moderate losses in all but the July contract, which has poked into positive territory.
- A weak cash hog market is weighing on lean hog futures today. Packers have reduced kill hours in an effort to improve profit margins and cash hog bids are steady to lower today on light demand.
- The last time pork cutout values firmed was June 27, but recently price declines have been slight and movement has picked up substantially, signaling a low may be near.
- July lean hogs are benefiting from the slight discount they hold to the cash hog index ahead of Monday's expiration.