Corn futures are 9 to 12 cents higher this morning.
- Yesterday, USDA lowered its "good" to "excellent" rating for the corn crop by 2 points to 66%, whereas trade had expected this rating to hold steady. This also resulted in a 3-point drop in Pro Farmer's weighted Crop Condition Index.
- This paired with slow development of the crop is lifting futures today. Just 16% of the corn crop is silking compared to 35% on average. Of note, just 1% of the Iowa crop is silking versus 29% on average.
- This has spurred some concern about hot, humid conditions currently in effect for the Corn Belt. However, milder temps and precip are expected by the weekend.
- Corn is also enjoying some technical buying thanks to the December contract's ability to bounce off support at $5.00 yesterday.
Soybean futures have surged 20- to 30-plus cents higher.
- Yesterday's unexpected drop in condition ratings and a reminder of the slow pace of development for the bean crop is lifting the soybean market today.
- USDA lowered its "good" to "excellent" soybean condition rating to 65% from 67%. Traders had expected no change over week ago. This also resulted in a 3-point decline in Pro Farmer's weighted Crop Condition Index.
- Plus, just 26% of the bean crop is blooming, compared to 40% for the five-year average pace. Of note, just 13% of the Iowa crop is blooming, which is 39 percentage points behind the normal pace and 58 points behind year-ago.
- This bearish condition and progress data is acerbating concerns about hot, dry conditions in the Corn Belt at present. However, more favorable conditions are expected this weekend forward.
- The market's gap-higher start is also spurring some technical buys.
Wheat futures are up 7 to 9 cents in Chicago and 5 to 7 cents in Kansas City. Minneapolis wheat is enjoying gains ranging from 4 to 6 cents.
- Spillover from corn and beans and a weaker U.S. dollar index are lifting wheat futures.
- Wheat is also benefiting from a 2-point decline in USDA's spring wheat condition rating yesterday. It now rates 70% of the crop "good" to "excellent." The Pro Farmer weighted Crop Condition Index also fell 3 points.
- But buying enthusiasm is being somewhat tempered by news on the demand front. For one, reports Russia has harvested 20 MMT of wheat so far this season of its expected 50 MMT crop reminds that the U.S. will face export competition.
- Meanwhile, Japan has been substituting U.S. western white wheat with U.S. club white wheat, U.S. SRW wheat and Australian premium white. It says USDA must complete its investigation into the GMO wheat discovery.
- A 1- to 5-cent slide in Gulf basis this morning signals increased farmer selling.
Live cattle futures have seen highly choppy trade this morning; most contracts are currently posting slight losses. Feeder cattle futures are posting slight losses.
- Traders are engaging in some light profit-taking after yesterday's firmer close.
- A few hundred head of cattle changed hands in Iowa yesterday at steady with week-ago prices, but other locations have yet to set bids.
- Futures are at a $3-plus premium to last week's $119 cash cattle trade, signaling a friendly bias toward this week's cash prospects.
- Showlist estimates are tighter this week, which could give feedlots some bargaining power. But recent declines in the product market have eroded packer profit margins, which could make them a tough sell.
- Yesterday, boxed beef prices were mixed and movement was light.
- Feeder cattle futures are seeing some light profit-taking following yesterday's strong gains. Firmer corn prices add to the negative tone.
Lean hog futures are enjoying slight gains this morning.
- Lean hog futures are enjoying light followthrough buys this morning.
- But steady to lower cash hog bids again today amid limited demand and efforts to trim kill runs to improve margins are limiting buying enthusiasm. Packer profit margins are hovering around breakeven.
- But hot, humid conditions across the Corn Belt are stressing animals and could make feedlots unwilling to transport animals.
- Nearby contracts are also benefiting from the wide discount they hold to the cash hog index.
- But yesterday's 55-cent slide in the pork market on light movement keeps demand concerns close at hand.