What Traders are Talking About:
Overnight highlights: As of 6:15 a.m. CT, corn futures are trading 4 to 6 cents higher, soybeans are 13 to 15 cents higher and wheat futures are ranging from steady to 12 cents higher with Chicago contracts leading gains. Bulls have the solid upper hand, suggesting the day session will start with a firmer tone at 8:30 a.m. CT. But will buying interest persist ahead of tomorrow's holiday break given benign weather forecasts? Cattle futures are expected to open with a mixed tone this morning, while lean hog futures are seen opening under light pressure.
* China buys corn, wheat on price break. China recently purchased 3 cargoes of new-crop U.S. corn at a price $62.50 cheaper than domestic supplies. State-run China National Grain and Oils Information Center says this pushes Chinese purchases of U.S. corn to 2.8 MMT. Meanwhile, export sources signal China also recently booked six cargoes of Australian wheat. State-owned COFCO was reportedly the buyer, but the cargoes are intended for supplying the domestic market, not for state reserves. There is also talk China is shopping around for U.S. wheat. An export source told Reuters the talk is China booked around "700,000 -800,000 MT of overseas wheat" on the recent price break.
The long and short of it: Chinese demand is the truest sign that corn and beans have reached "value" levels. But with weather seen as favorable for corn development and winter wheat harvest underway, will there be enough demand to spark more than a short-term corrective bounce?
* Weather remains non-threatening. Forecasts for the key post-Fourth time frame are non-threatening as they feature moderate temps and precip chances, especially in the drier areas of the southeastern Corn Belt. The National Weather Service forecast for July 8-12 calls for below-normal temps over the heart of the Corn Belt, with only Ohio expected to see above-normal temps. The precip outlook calls for above-normal rainfall across the Corn Belt, with the heaviest rains in drier southeastern areas of the region.
The long and short of it: A non-threatening forecast will make it difficult to attract sustained buying interest, especially if crop condition ratings continue to rise.
* Holiday trading schedule. Given Thursday's Independence Day holiday, the trading schedule is altered the remainder of the week. Grain markets will close at noon CT today, while livestock markets will stop trading at 12:15 p.m. CT. All markets and government offices are close Thursday, July 4, and there will be no overnight electronic trade that day. Grain markets reopen at 8:30 a.m. CT and livestock markets begin trading at 9:05 a.m. CT on Friday, July 5. Grain and livestock markets will have normal closing times Friday.
The long and short of it: Have a safe Fourth of July celebration. I'll provide my normal market commentary early Friday morning coming out of the one-day holiday.
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