Corn futures continue to see losses around 1 to 3 cents.
- Traders are hesitant to add long or short positions ahead of the extended holiday weekend.
- Heat is expected to linger in the Midwest until Sunday when milder temps are forecast to arrive. However, limited precip is expected and heat is forecast to build again in the upper Midwest and western Corn Belt next week.
- Gulf basis dropped 20 cents for August delivery to $1.00 over September futures this morning. Basis slid 5 cents for September delivery and it was steady to 3 cents higher for deferred delivery. This signals increased farmer sales and possibly a pullback in demand.
- International Grains Council raised its 2013-14 world corn production forecast by 3 MMT due to an anticipated increase in U.S. production.
Soybean futures are 9 to 15 cents lower this morning through the July contract.
- Profit-taking ahead of the extended Labor Day weekend is pressuring the bean market. Strength in the U.S. dollar index is encouraging of this.
- Traders are exiting bets ahead until they see how the forecast looks next week and USDA's update on the condition of the crop Tuesday. Declines are expected after record- or near-record heat in the Corn Belt caused pod abortion and premature crop death this week.
- But milder temps are expected to move into the Midwest Sunday and the eastern Belt is expected to see below-normal temps Sept. 4-8. However, the rest of the Midwest is slated to see normal to above-normal temps and the entire Corn Belt has below-normal precip chances.
- Traders are ignoring USDA's announcement of a 110,000 MT soybean sale to China for 2013-14. Strong soy demand is seen as factored into prices.
- Gulf basis firmed 5 cents for August and early September delivery this morning and 3 cents for last half September delivery. Basis was steady for October and November delivery and 2 cents higher for December. This signals more export news may lie ahead.
SRW wheat futures have firmed to trade 2 to 6 cents higher and HRW wheat is now around a penny higher. HRS wheat is mixed.
- Corrective short-covering ahead of the weekend and Labor Day is lifting the wheat SRW and HRW market.
- But otherwise, buying interest is limited as there is no fresh demand news for the market to digest and corn is posting slight losses this morning.
- Also limiting buying interest is news International Grains Council raised its world wheat production forecast by 4 MMT to 691 MMT as it anticipates production gains in Canada, the EU and Ukraine.
- News Pakistan imported 92,108 MT of Russian wheat -- the first purchase in three years -- reminds that U.S. wheat is facing stepped up export competition.
- Gulf basis firmed 4 cents for immediate delivery this morning, but it fell 5 cents for October. Other months held steady.
Live cattle futures are off to a narrowly mixed start, with feeder cattle futures slightly to moderately higher.
- Traders are evening positions as they wait for active cash trade to get underway.
- Light cash cattle took place in Iowa at $124 to $125 yesterday and at $194 to $195 in the dressed market in Nebraska late yesterday, which was steady to lower compared to the week prior. Trade has yet to get underway in southern locations.
- Weakness in the boxed beef market and higher showlist estimates this week could give packers an edge in negotiations, especially since they are preparing for a holiday-shortened week.
- Yesterday, Choice and Select boxed beef values fell 57 cents and $1.20, respectively, on very light movement of 135 loads.
- Tight supplies and losses in the corn market are lifting feeder cattle futures.
Lean hog futures enjoying slight gains in all but the front-month this morning. October lean hogs are down slightly.
- Early cash hog bids are steady to lower, though some expect bids to hold mostly steady later today as Midwest heat has slowed animal weight gain and made producers reluctant to transport hogs. Packers are still enjoying wide profit margins.
- Also, cash prices have fallen for 10 consecutive days, and the historic trend indicates a seasonal low may be near. This idea has some traders covering short positions ahead of the extended holiday weekend.
- The pork cutout value slid another 73 cents yesterday, but movement was decent at 344.1 loads.