Corn continues to favor the downside, though it has ventured into positive territory at times this morning.
- Corn is choppy this morning amid increased caution among investors. Some are taking advantage of dollar strength by booking profits.
- Rain in the forecast is expected to be light, scattered and largely nullified by continued heat in the Corn Belt. But traders are nevertheless wary to add long positions until the precip event plays out.
- Talk high prices may have encouraged China to cancel corn purchases is also encouraging some light profit-taking.
Soybean futures have reversed early losses and are now enjoying gains of mostly 7 to 15 cents, with nearby contracts leading gains.
- Soybeans were initially pressured by the forecast for late-week rain chances, which could still benefit the soybean crop, as the key pod-filling stage still lies ahead. But the fact that these are expected to be scattered and light has allowed bulls to again take the reins.
- Firmer Gulf basis levels for August, September and November delivery this morning is another source of support.
- Soybean futures posted an all-time high on the weekly continuation chart this morning.
Wheat is mostly 4 to 11 cents lower at all three exchanges.
- Wheat needs spillover from corn to rally; as that is lacking today, traders are taking advantage of a firmer dollar by booking profits.
- But the market's downside is limited by concerns about wheat production in other areas of the world. Most recently, Russia's ag ministry lowered its grain production and export forecast. Crop concerns also exist in Australia, Europe and China, among other locations.
Live cattle are enjoying $2-plus gains in 2012 contracts. Feeder cattle futures are sharply higher to their $3.00 daily limit higher.
- Cash cattle trade took place yesterday at mostly $113, which is below both nearby futures prices and last week's cash trade, but the market is more focused on signs beef demand may be improving.
- Yesterday, Choice boxed beef prices rose 61 cents, while Select cuts firmed 67 cents Movement was also solid at 204 loads. This has the market hopeful a low is in for beef, though this trend must continue to encourage interest in the long side of the market.
- Feeder futures are enjoying strong, much-overdue short-covering thanks to earlier weakness in the corn market.
Lean hog futures posting moderate gains in most contracts.
- Hog traders are covering short-positions on signs the pork product market is working on a near-term low. Yesterday, the pork cutout value rose $1.22 and movement was strong at 111.3 loads.
- While packer margins have improved this week, they remain in the red. Therefore, cash hog bids are steady to lower this morning.
- Plus, concerns remain that high temps will trim consumer grilling demand.
- August lean hogs are also benefiting from the steep discount they hold to the cash index.