Corn futures are called to open 3 to 5 cents lower this morning.
- Corn futures ended the overnight session mostly 3 to 4 cents lower, though the September contract was 7 cents lower.
- Traders are ignoring a drop in crop condition ratings. USDA's weekly crop ratings showed 56% of the bean crop is rated "good" to "excellent," down 3 points from last week. When plugged into the weighted Pro Farmer Crop Condition Index (0 to 500 point scale), corn dropped 9 points to 346. Iowa led the condition decline.
- Overnight forecasts added slightly better rain chances for some areas of the Corn Belt by late in the weekend, though conditions are generally expected to be hot and dry. Traders are confident production will still be record-large despite stressful late-season conditions.
- A lack of global end-user buying continues to hang over the market and limit buying interest. Despite the sharp drop from last summer's highs, corn is still trying to rebuild its demand base.
Soybean futures are called to open 6 to 10 cents lower this morning.
- Soybean futures ended the overnight session 7 to 12 cents lower, but finished well off the overnight lows.
- Traders are ignoring a drop in crop condition ratings. USDA's weekly crop ratings showed 54% of the bean crop is rated "good" to "excellent," down 4 points from last week. When plugged into the weighted Pro Farmer Crop Condition Index (0 to 500 point scale), beans dropped 9 points to 342. Iowa led the condition decline.
- Forecasts remain hot and mostly dry for the Corn Belt into next week. But overnight weather models suggested slightly better rain chances for some areas this weekend. Still, no widespread, meaningful precip is likely.
- While the U.S. soybean crop is limping to the finish line amid stressful late-season conditions, traders are expecting a big 2013-14 South American crop. Recent price strength is encouragement for South American producers to expand soybean acreage intentions ahead of their planting season.
Wheat futures are expected to open 1 to 3 cents weaker this morning.
- SRW, HRW and HRS wheat futures finished the overnight session mostly 2 to 3 cents lower.
- Pressure on corn futures overnight spilled over into the wheat market as wheat remains a follower amid a lack of fresh fundamental news.
- Ongoing harvest of the spring wheat crop in the Northern Plains is providing light seasonal pressure. But harvest-related pressure should start to ease as spring wheat harvest has pushed to 64% complete as of Sunday.
- Traders are still waiting on results of the tender from Egypt. Most likely, Egypt will make purchases of Black Sea origin wheat. U.S. wheat remains priced above that of our competitors, especially from the Black Sea region.
- A mildly weaker U.S. dollar index may help limit selling pressure this morning.
Live cattle futures are called to open steady to lower. Feeder cattle are seen opening steady to firmer.
- Price action is likely to be light and choppy in the live cattle market today as traders wait on direction from the cash cattle market. While tightening market-ready supplies suggest cash trade will be on an upward trajectory, packers have been reluctant to actively raise cash bids in the Plains.
- Plus, futures are already trading at a premium to the cash market, which limits traders' urgency to build in more cash strength.
- Traders continue to have demand concerns as they are uncertain how retailers and consumers will respond to high beef prices, especially now that grilling season has unofficially come to an end. Boxed beef prices were mixed Tuesday and movement was nothing spectacular.
- Feeder cattle futures are expected to be supported by weakness in corn. But a lack of solid buying interest in live cattle should limit gains in feeders.
Lean hog futures are called to open mildly firmer this morning.
- Lean hog futures closed higher and near session highs Tuesday, which is expected to spark mild followthrough buying this morning.
- Traders are also cognizant of the discount fall- and winter-month futures hold to the cash market. While seasonal pressure is likely as supplies build, they aren't wanting the spread to get any wider.
- Cash hog bids are expected to be steady at most Midwest locations again today as packers work to fill up late-week slaughter runs. Profitable margins give them incentive to keep kill lines as full as possible.
- Hot temps are expected to move back into the Midwest today, which will stress hogs and could slow movement late in the week.