Corn futures have reversed early losses to trade slightly higher across the board.
- Price action is choppy amid a lack of market-moving news.
- Gulf basis levels softened for immediate delivery due to export disruption related to Tropical Storm Isaac.
- USDA lowered its corn condition rating yesterday, but market action indicates this is already factored into prices. Attention has shifted to finding a price that rations use enough to stretch supplies.
- The European Union corn yield forecast was cut from 6.73 metric tons (MT) per hectare to 6.28 MT a hectare by the Monitoring Agricultural Resources body.
Soybean futures are mixed with the September through March contracts favoring the downside and far-deferred months the upside.
- Soybeans are facing light profit-taking on improved late-week rain chances thanks to Tropical Storm Isaac. This could help the filling bean crop, though preceding heat and dryness will stress the crop.
- Gulf basis levels are steady to lower today, also thanks to the approaching tropical storm.
- Yesterday USDA lowered its crop condition rating for the bean crop, but market action signals this is already factored into prices.
- News China bought 110,000 metric tons (MT) of soybeans for 2012-13 should limit selling pressure.
Wheat futures have improved to mostly firmer trade in at all three locations.
- Losses in the corn and soybean market initially pressured wheat, but as they moved off their lows, wheat futures firmed as well.
- Indications El Nino is building is supportive as it points to dryness in key Australian wheat production areas.
- Plus news UkrAgroConsult cut its grain crop forecast by 1.49 million metric tons (MMT) to 42.38 MMT brings Black Sea production concerns back into focus.
- Outside markets are mildly supportive this morning as hopes of stimulus measures from the U.S. Federal Reserve and European officials are outweighing disappointing consumer confidence data in the United States.
Live cattle futures are off to a slightly firmer start.
- Live cattle futures are enjoying some corrective short-covering amid ideas the downside was overdone yesterday.
- However, buying interest will likely remain limited as packers are preparing for a holiday-shortened week and the boxed beef market has recently weakened notably. Yesterday, boxed beef prices fell and movement was light.
- Showlist estimates are slightly tighter this week, but other signs point to steady to lower cash cattle trade. August futures are already below last week's cash prices.
Lean hog futures are choppy in early trade.
- Lean hog futures are seeing some light short-covering after losses yesterday, as futures are well below the cash hog index. But that is the extent of buying interest.
- Supplies are expanding seasonally and the market is also absorbing increased liquidation. This is keeping cash hog bids steady to lower, especially as packers are preparing for a holiday-shortened week.
- This has also weighed on the product market. Yesterday, the pork cutout value slipped $1.60 and movement slowed to 48.13 loads.