Corn futures remain roughly 8 to 13 cents lower.
- Spillover pressure from the soybean market due to better-than-expected weekend rains is making it difficult for the corn market to find buyers, despite the fact the rains will at best stabilize the struggling corn crop.
- Traders expect this afternoon's crop condition data from USDA to show further declines in the corn ratings due to widespread drought.
- Gulf basis levels softened for August and November delivery, pointing to demand destruction and increased farmer selling.
Soybeans have softened slightly to post losses in the low 40s through the January contract, while deferred months are seeing losses of around 20-plus cents.
- Soybeans are still able to benefit from rain, so weekend showers that were more widespread and heavy than expected have encouraged profit-taking. This afternoon's crop condition ratings from USDA should provide a better idea as to how much rains helped.
- The China National Grain and Oils Information Center expects the country's bean imports to fall to 4.5 million metric tons (MMT) in August and to less than 4 MMT in September and October due to high international prices.
- Double-digit declines in Gulf soybean basis levels for August delivery is adding pressure.
- The market is ignoring USDA's announcement that China bought 106,000 metric tons (MT) of soybeans for 2012-13.
Wheat futures at all locations have softened to post slight to moderate losses in most contracts.
- Spillover from the corn and soybean markets are causing wheat futures to favor the downside this morning.
- Ongoing spring wheat harvest is an additional source of pressure for wheat futures.
- Also, traders expect USDA to again confirm the spring wheat crop is in relatively good shape compared to the corn and soy crops.
- But ongoing concerns about global wheat stocks is limiting pressure. Most recently, SovEcon lowered its Russian wheat production estimate to 40.5 MMT to 43 MMT from 46 MMT previously.
Nearby live cattle futures are cautiously higher in early trade, while far deferred months are slightly lower. Feeder cattle are enjoying $1-plus gains.
- Cattle futures are enjoying light, followthrough buying following sharply higher cash cattle trade last week.
- But buying interest is limited by the fact nearby futures are already at around a $2 premium to last week's $118 cash trade.
- Traders will watch showlist estimates and boxed beef action before forming cash cattle expectations for this week. Boxed beef action Friday was decent; Choice cuts slid 1 cent while Select cuts firmed 25 cents and movement was strong at 223 loads.
- Feeder cattle futures are benefiting from softer corn prices.
Lean hog futures are favoring the upside in choppy trade.
- Packers are again enjoying positive profit margins, but ample supplies will limit demand -- three Midwest plants are closed today. Early cash hog bids are steady to lower.
- Continued improvement in the pork market will be needed to encourage firmer cash prices. Friday, the pork cutout value rose 37 cents, but movement slowed to 34.25 loads.
- Nearby lean hog futures are also benefiting from the discount they hold to the cash index.
- Outside markets are also supportive of commodity buying as the U.S. dollar index is under light pressure while the stock market is enjoying moderate gains.