Corn futures remain choppy with the September and December contracts currently favoring the downside while deferred months are mostly firmer.
- Corn has been choppy this morning thanks to mixed fundamental signs.
- Rains overnight and this morning make it difficult for corn to rally though precip now will do little more than stabilize the crop.
- The market saw proof of demand rationing in this morning's weekly export sales data. USDA reported net sales reductions of 9,100 metric tons (MT) for 2011-12 and sales reductions of 131,300 MT for 2012-13.
- This morning, the International Grains Council cut its world corn production forecast for 2012-13 by 53 million metric tons (MMT) to 864 MMT. Most (50 MMT) of this reduction comes from the U.S. corn crop due to heat and dryness.
- Gulf basis levels softened for July and August delivery this morning.
Soybean futures have softened to post double-digit losses again.
- Soybeans still stand to benefit from rains overnight and this morning. Some weather forecasts call for more beneficial rains over the next five days though others have turned drier for this period. The Midwest is also expected to enjoy a temporary break from scorching heat.
- Also pressuring futures is the International Grain Council's expectation for world soybean production to rebound by 9% in 2012-13, thanks to improved South American output.
- But losses are being limited by signs significant demand rationing has yet to be achieved. Weekly export soybean sales were stronger than anticipated at 193,200 MT for 2011-12 and 517,300 MT for 2012-13. Soymeal sales also impressed.
Wheat futures are mixed with a downside bias.
- Choppy action in the corn market and a sharply lower dollar have kept a floor under wheat, but market bears have the upper hand.
- Weekly wheat export sales of 367,000 MT for 2012-13 fell short of expectations.
- Minneapolis wheat futures are struggling to find buying interest as the Wheat Quality Council HRS tour is finding yield potential above year-ago in North Dakota so far this week. The tour will move through central and northeastern parts of the state today.
Live cattle futures are slightly higher in early trade. Feeder cattle futures have reversed early losses to trade higher.
- Expectations that cash cattle trade will get underway at higher prices given this week's tighter showlist estimates and improvement in the boxed beef market are helping futures to favor the upside, though they are already well above last week's $113 trade.
- Yesterday, boxed beef prices were mixed but movement impressed at 268 loads.
- Gains are being kept in check by another week of softer weekly beef exports. Today's tally of 14,600 metric tons (MT) was 1,000 MT below the week prior.
- Feeder cattle futures reversed early losses as the corn market softened.
- Improving jobs data is offsetting disappointing housing data this morning. Thus, the US dollar index is sharply lower while the stock market is enjoying strong gains.
Lean hog futures are enjoying slight gains in most contracts.
- The combination of recent steady to lower cash hog bids and firmer pork product prices has pulled some packer profit margins into the black. If maintained, this should support the cash hog market.
- But the break in the heat and lofty feed prices will likely encourage many producers to move hogs to market. The influx in supplies will likely weigh on the cash market for now.
- Yesterday, the pork cutout value rose 16 cents and movement was solid at 78.4 loads.
- Outside markets are also supportive as the dollar is sharply weaker and traders have a risk-on attitude today.