WEAKER TONE OVERNIGHT... As of 6:30 a.m. CT, corn futures are trading 4 to 6 cents lower, soybeans are mostly 2 to 5 cents lower and wheat futures are narrowly mixed with a slight downside bias. The U.S. dollar index is modestly firmer this morning after two-sided trade overnight.
FORECAST CONTINUES TO CALL FOR BUILDING HEAT, DRYNESS... Temps are forecast to be normal to slightly above-normal across the Corn Belt next week, while there is very little chance for rains. With some of traders' focus back on weather amid the building heat and continued dryness, midday weather updates could influence how traders position themselves ahead of the weekend.
USDA ISSUES SUGAR PURCHASE INVITATIONS FOR FEEDSTOCK FLEXIBILITY PROGRAM... USDA's Farm Service Agency (FSA) announced that sugar purchase invitations have been extended to solicit bids to the Commodity Credit Corporation (CCC) through the Feedstock Flexibility Program (FFP). Congress created FFP in the 2008 Farm Bill, which requires the purchase of sugar as a feedstock for producing fuel-grade ethanol and other biofuels to avoid forfeiture of sugar pledged as collateral by processors when securing nonrecourse commodity loans from CCC. The move follows two sugar "exchanges" earlier this summer. The last time sugar forfeitures occurred was in 2004, but market conditions have caused USDA to take several actions this crop year to avoid forfeitures and ensure the sugar program operates at the least cost to the federal government.
WITH BLOODSHED IN EGYPT, NO SUSPENSION OF U.S. AID... White House officials continue to reject any calls to suspend the $1.3 billion in military aid that Washington sends to Cairo each year, despite the Egyptian military’s action. Sen. Rand Paul (R-Ky.) , criticized the president’s policy and said, "Chaos only continues to grow in Egypt. So Mr. President, stop skirting the issue, follow the law, and cancel all foreign aid to Egypt." Paul was unsuccessful with an amendment last month to halt all military assistance to Cairo and redirect it to domestic infrastructure programs. Senators voted 86-13 to table, or kill, the amendment. But support for Paul’s efforts could grow if the military continues its crackdown, with more efforts to restrict aid likely when Congress returns from recess in September. The U.S. has, however, halted joint military exercises with Egypt in response to the situation.
INDIAN CORN EXPORTS TO PLUNGE... India's corn exports could drop around 40% in 2013-14 as untimely late-season rains caused crop damage and pushed prices sharply higher. Export source told Reuters India's corn exports could fall under 3 MMT in the new marketing year from 4.8 MMT in 2012-13. Most buyers in southeast Asia, where India exports the bulk of its corn, are expected to turn to cheaper South American supplies.
STILL WAITING ON CASH CATTLE TRADE... Cash cattle negotiations remain at a standstill in the Plains, with feedlots seeking higher prices and packer bids still $2 below week-ago. Traders eventually expect to see at least $1 higher cash prices compared with last week's $121 trade in Texas and Kansas. August live cattle futures ended Thursday at more than a $2.50 premium to last week's cash trade, meaning cash strength is already built into the market.
PORK CUTOUT DROPS... The pork cutout value finished 71 cents lower Thursday, but that was a marked improvement from the $3.05 price plunge seen yesterday morning. Still, the pork product market is weakening and that's putting pressure on packer margins. If that continues as supplies build seasonally, the cash hog market will come under pressure.
OVERNIGHT DEMAND NEWS... South Korea purchased a total of 73,300 MT of U.S. wheat in two separate tenders, but passed on a tender to buy 55,000 MT of optional origin corn. Taiwan tendered to buy up to 60,000 MT of U.S. or South American soybeans.