Corn futures are called to open mixed after a choppy overnight session.
- Corn futures favored a firmer tone in overnight trade but softened late. July corn ended firmer, with the rest of the market marginally to a penny lower.
- Initial overnight price support came from concerns about the crop, as yesterday's crop progress report from USDA reminded the market of how much of the crop lags normal development.
- But the Pro Farmer weighted Crop Condition Index improved 1.7 points from last week due to slight improvement in the Illinois and Minnesota crops. Iowa and Indiana crop condition ratings slipped last week.
- The latest NWS 6- to 10 -day outlook calls for above-normal temps and precip for the bulk of the Corn Belt. While warmer temps will help with growing degree day accumulation, a continuation of the wet trend will stress crops in waterlogged areas.
Soybean futures are called 3 to 5 cents higher on concerns about the slow planting pace.
- Soybeans ended the overnight session mostly 2 to 5 cents higher, which was off session highs.
- Futures were supported overnight by concerns about the slower-than-usual planting pace. USDA reports 85% of the crop was planted, which was slightly below traders' expectations and reflects around 11.6 million intended acres were left to plant as of Sunday.
- Traders are hopeful a large chunk of those unplanted soybean acres will be seeded today and tomorrow before another storm system moves into the Corn Belt.
- And yesterday's NWS 6- to 10-day forecast is not favorable for planting as it calls for above-normal precip.
- Meanwhile, our initial Crop Condition Index for soybeans kicked out a rating of 361.37 points (0 to 500 point scale), which is up from 344.20 last year at this time.
- Additionally this morning, USDA announced a 240,000-MT new-crop soybean sale to China, which should help to support new-crop futures.
Wheat futures are called to open 3 to 5 cents higher on short-covering.
- Wheat futures ended the overnight session mostly 3 to 5 cents higher on short-covering, which was mid-range.
- The slower-than-usual winter wheat harvest pace is supportive for the market, although as progress picks up, it will limit buying due to the increase of hedge-related pressure.
- USDA reports 11% of the crop was harvested as of Sunday, which is behind the five-year average of 25%.
- Our weighted Crop Condition Index for the spring wheat crop improved, but with just 84% of the crop emerged at this late date, traders are concerned about how much of it will make it to the first freeze before harvest begins.
- The latest NWS 6- to 10-day forecast is more favorable for harvest as it calls for normal to below-normal precip across the Central and Southern Plains.
Live cattle futures are called to open mixed on a combination of profit-taking and followthrough buying.
- Live cattle futures posted a late-session recovery yesterday and many contracts posted bullish reversals. Key this morning will be if the market sees followthrough buying, as this would suggest a near-term low is in the works.
- But live cattle are vulnerable to profit-taking as traders remain cautious about adding long positions given concerns about beef demand.
- The boxed beef market started the week on a solid note as Choice values rose $1.66 to return above $201 per cwt. Select values rose 24 cents, but movement for the day was light at 146 loads.
- This week's cattle showlist is up from last week after supplies were carried over for consecutive weeks. This gives feedlots less bargaining power in cash negotiations and puts more pressure on the boxed beef market to improve.
- Feeder cattle futures will be directed by price action in live cattle futures this morning.
Lean hog futures are called to open mixed on a continuation of yesterday's choppy tone.
- Lean hog futures ended mixed amid bull spread unwinding yesterday, as nearbys ended the day slightly lower.
- Pressure on futures will be limited by the 22-cent gain in the pork cutout market which helps to lift packers' profit margins. But demand for cash hogs is light as packers work to scale back kill hours to accommodate tighter market-ready supplies.
- Plus, packers only moved 237.3 loads of pork product yesterday.
- The cash hog market is expected to be mostly steady today, but some weaker tones could develop depending on demand.
- Pressure on nearby futures should be limited by the discount those contracts hold to the cash index.