Corn futures are 3 to 6 cents higher in early trade.
- Traders are focused on dryness concerns in the Midwest as the forecast calls for heat in both the 5- and 10-day outlook. Rain is also in both these outlooks, however.
- Day 2 of the Pro Farmer Midwest Crop Tour revealed a corn yield in Indiana of 167.36 bu. per acre, which compares to 113.25 bu. per acre last year and a three-year average of 141.14 bu. per acre. But scouts did note the need for rain.
- The western leg of the Tour found a Nebraska corn yield of 154.93 bu. per acre, which compares to 131.79 bu. per acre last year and a three-year average of 147.93 bu. per acre. Scouts deemed this as an "ordinary" Nebraska corn crop.
- Route reports from Iowa and Illinois today will be monitored by market participants.
- Support also stems from an 8- to 20-cent surge in Gulf basis for August delivery this morning. Basis also rose 12 cents for September and 4 cents for October delivery, signaling export demand news may be on the horizon.
- Weekly ethanol production fell 13,000 barrels per day (bpd) the week ended Aug. 16 to 844,000 bpd. Ethanol stocks rose 57,000 barrels to 16.48 million barrels.
Soybean futures have backed slightly off their highs, but futures are still enjoying gains in the upper teens to low 20s.
- Building dryness continues to support the bean market, as heat in the forecast could cause drought to expand or intensify. Heat is concerning as the crop is in its key pod setting and pod fill stages.
- Yesterday's NWS forecast for Aug. 26-30 calls for above-normal temps across the Corn Belt, with normal to mostly above-normal precip. Heat is also expected to intensify in the upper Midwest late this week, though scattered showers are possible.
- Day 2 of the Pro Farmer Midwest Crop Tour revealed Indiana soybean pod counts in a 3'x3' square at 1,185.14, which compares to 1,033.24 last year and a three-year average of 1,136.48.
- Nebraska soybean pod counts in a 3'x3' square totaled 1,138.94, which compares to 894.43 last year and a three-year average of 1,162.42.
- Route reports and photos from Day 3 of the Pro Farmer Midwest Crop Tour will influence price action again today.
- Traders are brushing off news Statistics Canada expects record-large canola production of 14.734, as the tally fell a bit short of the average pre-report guess.
Wheat futures are roughly 2 to 6 cents higher for SRW and HRW wheat, while HRS wheat is mixed.
- Early gains in the wheat market have encouraged bouts of light profit-taking. Strength in the U.S. dollar index is also encouraging to that end.
- Otherwise, spillover from the corn market is largely setting the tone for the wheat market.
- Stats Canada pegs all wheat production at 30.56 MMT, which came in above expectations and 3.357 MMT above year-ago.
- Gulf SRW wheat basis is steady this morning.
- Harvest-related hedge pressure is limiting buying interest in the HRS market.
Live and feeder cattle futures are off to a choppy start. At present, the front month contracts are up slightly while deferred months are facing light pressure.
- Nearby live cattle futures are seeing light gains, signaling traders expect the recent trend of higher cash cattle trade to continue this week. August live cattle are at around a $1 premium to last week's $123 action on the Southern Plains.
- Showlist estimates are down and supplies are expected to tighten going forward. Friday's Cattle on Feed Report is expected to serve as a reminder of this.
- But boxed beef market performance thus far this week has failed to impress. Yesterday, Choice boxed beef cuts rose 38 cents and Select declined $1.33. While movement picked up, the tally was still far from strong at 150 loads.
- Strength in the corn market is encouraging some light profit-taking in feeder cattle futures, though the uptrend remains intact.
Lean hog futures posting slight to moderate losses this morning.
- Cash hog bids are steady to lower again today due to building supplies and limited demand. A few plants are in need of loads for Friday and Saturday's kill, but other plants will keep bids 50 cents to $1 lower as supplies are building.
- Supplies will likely continue to build as the cooler temps of fall arrive, increasing hog consumption and weight gain.
- But improvement in the pork cutout value yesterday is helping limit pressure. The pork cutout value rose marginally and movement improved to 389 loads yesterday.
- Also limiting selling interest is the $15 discount the October contract still holds to the cash hog index.