Corn continues to trade 20-plus cents higher.
- Weekend rains were generally disappointing and the near-term forecast calls for heat to build with limited rain chances. Plus, evening temps are expected to stay above 70°F, which is worrisome for corn in the kernel-fill stage.
- Therefore, traders expect this afternoon's crop condition ratings from USDA to show continued deterioration in the crop with more declines likely ahead for subsequent reports if the forecast plays out as expected.
- News that more than 1,000 irrigators across Nebraska were ordered by the state to stop pumping water from rivers and streams adds to yield concerns.
Soybeans continue to enjoy 30-plus-cent gains.
- The National Weather Service forecast for July 21-25 calls for above-normal temps and below-normal precip for the bulk of the country, which is raising concern about the soybean crops' ability to hold blooms and add growth.
- Limited rain last week is expected to result in additional crop condition rating declines from USDA this afternoon, heightening concerns about tight supplies.
- Beans are also benefiting from a stronger-than-expected soybean crush pace in June of 134.156 million bu., according to NOPA. Soyoil stocks declined slightly from the previous month to 2.306 billion pounds.
Wheat is enjoying gains mostly in the 20s at all locations.
- Wheat is enjoying spillover support from corn futures.
- Also, USDA announced a 107,214 metric ton (MT) wheat sale to Japan for 2012-13; 69,784 MT is hard red spring wheat and 37,430 MT is soft white wheat.
- And global crop concerns have vastly improved U.S. export prospects. The latest news on this front is Russia's Ag Minister expects the country to harvest 45.3 million metric tons (MMT) of wheat this year, compared to 56.2 MMT in 2011.
Cattle futures are under moderate pressure this morning, with feeders sharply to limit lower.
- Nearby live cattle futures are being pressured by the premium they hold to last week's $114 to $115 cash cattle trade.
- High temps across the U.S. could trim consumer demand, limiting the possibility beef strength will justify higher cash cattle trade this week. On Friday, Choice cuts plummeted $2.09 while Select values softened 85 cents. Movement slowed to 174 loads.
- Heat and dryness has also led to more herd liquidation, increasing near-term supplies. But this also tightens supplies down the road, limiting pressure on deferred contracts.
- Outside markets are an additional source of pressure thanks to IMF cutting its global economic forecast and disappointing U.S. retail sales data.
- Feeder cattle futures are sharply to limit lower thanks to the ongoing rally in the corn pit.
Lean hog futures are narrowly mixed this morning.
- Steady to lower cash hog bids are giving market bears a slight upper hand this morning. While packer profit margins have improved, they are still negative, limiting demand for cash hogs.
- While price declines in pork cutout values have recently moderated and movement has picked up, signaling a near-term low may be near, prices must improve to boost futures and the cash hog market.