Corn futures are 4 to 5 cents lower this morning.
- Light profit-taking after yesterday's strong gains is setting the tone this morning.
- Adding light pressure are favorable Day 1 results from the Pro Farmer Midwest Crop Tour for Ohio and South Dakota.
- Samples in Ohio pointed to a corn yield of 171.64 bu. per acre, which is a strong gain from the three-year average of 144.12 bu. per acre.
- South Dakota samples resulted in a corn yield estimate of 161.75 bu. per acre, which is also up sharply from the three-year average of 119.65 bu. per acre.
- But scouts did note building dryness in both states as well as maturity concerns for the South Dakota crop that could draw down yields heading into harvest.
- Pressure is being limited by a larger-than-expected decline in the condition of the corn crop. USDA now pegs 61% of the corn crop in "good" to "excellent" condition. On Pro Farmer's weighted Crop Condition Index this translated to a 5-point decline to 361 on our 0 to 500 (perfect) scale.
- Also, Gulf basis firmed a dime for immediate delivery this morning, signaling export demand news may lie ahead.
- Rain in the forecast for the upper Midwest later this weak is adding light pressure.
Nearby soybean futures are 6 to 8 cents lower, with deferred futures mixed.
- Traders are taking advantage of yesterday's strong gains by booking some profits.
- Day 1 of the Pro Farmer Midwest Crop Tour revealed Ohio soybean pod counts in a 3'x3' square of 1,283.61, which compares to the three-year average of 1,162.64. South Dakota soybean pod counts in a 3'x3' square totaled 1,016.68, which compares to the three-year average of 984.62 pods.
- But scouts did take note of dryness and the need for rain in these states to realize full yield potential. Heat in the forecast is not conducive to this end, but above-normal precip is forecast for both of these states in the 6- to 10-day outlook.
- Scouts reports from the field from Indiana, Illinois and Nebraska will likely influence price action today.
- Pressure is being kept in check by yesterday's confirmation from USDA that the soybean crop condition deteriorated due to increasing dryness last week. It rates 62% of the crop "good" to "excellent," down 2 percentage points from last week.
- Our weighted Crop Condition Index showed the crop declined by 3.6 points from last week to 358.6 on our scale (0 to 500 being perfect).
Wheat futures are off to a stronger-than-expected start, with SRW and HRW mixed and HRS wheat steady to 2 cents lower.
- Pressure on wheat futures this morning is being limited by ideas the downside has been overdone.
- But spillover pressure from corn and beans is keeping buying interest to a minimal.
- HRS wheat is benefiting from USDA data showing that harvest advanced to 18% complete as of Sunday, which is 20 percentage points behind the five-year average pace.
- Weakness in the U.S. dollar index is also limiting pressure, as it makes U.S. wheat more competitive globally.
Live cattle futures are mixed in early trade with nearbys up slightly and deferred months slightly lower.
- Nearby live cattle are benefiting from light buying interest as tighter showlists in the Southern Plains could again give feedlots an advantage in cash cattle trade negotiations.
- Traders believe a seasonal rally in the cattle market is underway as supplies will likely continue to tighten through fall while beef demand typically remains strong.
- But action in the boxed beef market will also be key to cash action this week. Choice boxed beef values rose 83 cents yesterday -- the seventh consecutive day of gains -- but Select values fell 24 cents and movement was light at 110 loads.
- Weakness in the U.S. dollar index is also supportive this morning.
- Feeder cattle futures are benefiting from softer corn prices.
Lean hog futures are enjoying slight gains this morning.
- October lean hogs remain at a steep discount to the cash hog index, which along with yesterday's stronger finish is supporting nearby contracts.
- Sharp losses in the U.S. dollar index is also supportive.
- Most plants are well supplied for the week, which is keeping cash hog bids steady to lower today, despite solid packer profit margins.
- Plus, supplies are building seasonally and Labor Day buying is largely wrapped up.
- This resulted in a $1.92 slide in the pork cutout value. Movement also slowed to 252 loads.