Outside markets continue to be a key source of support for commodities this morning, as the U.S. dollar index has weakened further. Investors are reacting to a better-than-expected monthly jobs report, which showed 163,000 non-farm payrolls were added in July (economists expected around 100,000 jobs to be added). The unemployment rate upticked from 8.2% in June to 8.3% last month.
Corn futures have improved to trade up to 12 cents higher, with nearbys leading gains.
- Sharp weakness is supportive for the commodity sector this morning, which is encouraging short-covering in the corn pit.
- While there are additional near-term rains in the forecast and harvest is picking up in southern areas, traders are returning their focus to dwindling crop prospects.
Soybean futures are 12 to 20 cents higher, with meal and soyoil seeing spillover support.
- Focus in the market is on position squaring ahead of the weekend and positive outside markets are encouraging short-covering following yesterday's losses.
- Traders are concerned weekend rains won't be widespread enough to benefit the soybean crop, which has begun its key pod-filling stage.
- China sold all of its 400,907 metric tons (MT) of state soybean reserves up for auction at a record average price. This signals demand remains strong and traders expect more near-term purchases of US soybeans to be made despite historic prices.
Wheat futures at all three exchanges have moved to fresh session highs to post double-digit gains. Chicago wheat is leading gains.
- Weakness in the U.S. dollar index is attracting fresh buying in the wheat pit this morning, as all signs point to strong demand for U.S. wheat given tightening global supplies.
- September Chicago wheat is outpacing gains in September corn futures to extend its premium due to tightening feed sources.
Live and feeder cattle futures opened higher on spillover from triple-digit gains in the U.S. stock market in reaction to better-than-expected job creation in July.
- All but the October live cattle contract are higher, as it pivots around unchanged.
- On top of positive outside markets, support for live cattle is coming from yesterday's $118 to $119 cash cattle trade, which was up $3 to $4 from last week.
- Feeder cattle futures have turned mixed, with some scattered profit-taking coming due to strength in the corn market.
Lean hogs are mixed, with nearbys under pressure on concerns about the cash market.
- The cash hog market is steady to $1 lower this morning amid expanding supplies. Sow liquidation and building supplies seasonally have packers working to improve profit margins.
- August lean hog futures have posted a fresh weekly low, with next support the July low of $89.75.
- Nearby lean hog futures are firmer on spreading with nearbys.