Julianne Johnston Pro Farmer Senior Markets Editor
From Pro Farmer
Updated as of 7:00 a.m. CT
Crop condition declines slightly... When USDA's weekly crop ratings are plugged into the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500 point scale), the corn crop declined 4 points to 354, while the soybean crop dropped 2 points to 349. For corn, declines were noted in Iowa and Nebraska. For soybeans, the Iowa and Indian crops declined.
Outside markets... Oil futures were weaker overnight amid profit-taking. This follows yesterday's sharp gains. At one point, crude oil was as much as $25 higher, touching $130 per barrel. That came in the October contract ahead of it's expiration in a squeeze play.
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Opening calls. These calls originate more than three hours before the open -- use caution, things change:
Corn: 3 to 4 cents lower. Futures saw light profit-taking pressure overnight. Futures settled mostly 16 to 21 cents higher yesterday, which was in the middle of the day's trading range. Corn gapped sharply higher on the open and bulls maintained a stronghold on price action the remainder of the day. Support came primarily from outside markets as inflationary talk moved back to the forefront.
Soybeans: 17 to 20 cents lower. Futures were lower overnight on profit-taking pressure. Futures posted a high-range close yesterday, ending 60-plus cents higher. Outside markets were largely behind Monday's sharp gains in the grain markets. The dollar was sharply lower, while crude oil and gold futures were sharply higher. Commodity markets were supported by the proposed government bailout plan. The plan is suppose to stabilize the economy, which in turn will help stabilize demand for raw goods.
Wheat: 3 to 4 cents lower. Futures were weaker overnight on spillover from yesterday's late-session move off session highs. Futures trimmed initial gains yesterday, but Chicago still left a gap open and closed around 20 cents higher. December Chicago wheat gapped above last week's high on the open, extended gains to a daily high of $7.57 before closing at $7.37 3/4. Initial support lies at the bottom of today's gap at $7.22, while the next level of resistance lies at the top of the Sept. 4 gap at $7.70.
Cash cattle expectations: Watching beef trade. Boxed beef prices were 25 cents to $1.20 lower Monday, although movement was solid at 309 loads. Cash cattle opinions are still up in the air, meaning beef trade will continue to be watched very closely. Cattle futures could also have a say in this week's cash cattle trade, especially if the market can string together strength.
Futures call: Mixed. Futures closed higher yesterday, but off session highs, which is resulting in the call for a mixed start this morning. If broad-based commodity strength continues today, live cattle could extend gains. Otherwise, profit-taking could weigh on the market and choppy price action is possible as traders wait to form cash cattle opinions.
Cash hog expectations: Steady to firmer. Cash hog bids are expected to be steady to firmer at most Midwest locations today as packers work to fill out slaughter runs. The 80 cent drop in the pork cutout value Monday should have limited impact on cash hog bids given packers are still working with very solid cutting margins.
Futures call: Mixed. Futures closed higher yesterday, but posted a mid-range close. As a result, calls are for a mixed open. But it will depend on how outside markets trade, as it will have an impact on hog futures. October hogs now hold just around a dollar discount to the CME lean hog index, which is projected at $69.74 tomorrow. It would be a shift in trade mentality to see futures at a premium to the index since they have held a discount (with one the exception of one week in June) since early May.