September corn futures are slightly higher, while deferred contracts have turned fractionally to a penny lower.
- Corrective buying and spillover support from soybeans lifted futures on the open with a slight easing in the pervasive bearishness as traders note expanding dry conditions in the western Corn Belt, but gains have been trimmed and deferred contracts have turned slightly negative.
- Weather forecasts remain cool, but have turned somewhat drier than projected earlier for the western Corn Belt and that is gaining some attention as the drought monitor talks about moderate drought conditions in Iowa.
- Tempering gains is the lighter-than-expected weekly corn export sales, which came in at 290,100 MT for 2012-13 and 220,900 MT for 2013-14. Traders were expecting to see sales of 600,000 MT to 1 million MT in response to the sharp price break.
- Gulf basis levels are unchanged in early morning trading.
Soybean futures are 12 to 20 cents higher on positive export news.
- Futures are stronger on positive export news and ideas the downside has been overdone.
- Tight supplies continue to support old-crop soybean futures and that support is shifting to the September contract as the August contract is in delivery. September futures are leading today's gains as a result.
- Futures are getting a lift from today's weekly soybean export sales report with sales coming in just above the top end of the pre-report guess range at 1.097 MMT -- 79,400 MT for 2012-13 and 1.018 MMT for 2013-14. The leading buyers were "unknown destinations," which has the trade thinking China, at 525,000 MT and China at 381,000 MT.
- Futures are also gaining support from reports Chinese soybean imports were record-large last month at 7.2 MMT. That was up 3.9% from June and 22.7% above year-ago. In addition, Chinese trade data for July is supportive as it shows total exports improved 5.1% and imports rose 10.9%.
- Also contributing to today's bounce is news China's attempt to auction old soybean reserves was met with tepid demand. Crushers bought only 89,928 MT out of 501,020 MT of 2009 and 2010 soybeans offered for sale.
- Some traders are turning their attention to growing conditions. Forecasts remain cool but precipitation has been disappointing for areas of the western Corn Belt, although there is plenty of precipitation in the central Plains and into Missouri. In addition, some traders are talking about the drought monitor which talks about moderate drought conditions in Iowa.
- Gulf soybean basis is 20 cents higher for last-half August delivery, unchanged for first-half September, 10- cents higher for last-half September delivery and 2 cents higher for October through December delivery.
SRW, HRW and HRS wheat futures are mostly 1 to 3 cents weaker.
- Wheat futures are following corn futures lower after attempting a corrective bounce.
- Futures are ignoring today's weekly wheat export sales, which were at the top end of pre-report expectations at 726,200 MT for 2013-14. Brazil was the lead buyer at 169,500 MT, including 27,000 MT switched from unknown destinations. China bought 60,800 MT, including 55,000 MT switched from unknown destinations.
- Despite the positive exports sales, traders remain concerned U.S. wheat is viewed as premium priced on the global market..
- Traders are also ignoring weakness in the U.S. dollar index.
- Gulf basis is 4 to 6 cents lower for August through December delivery.
Live cattle and feeder cattle futures are sharply higher, but have slipped from earlier levels.
- News Tyson plans to suspend purchases of cattle fed beta-agonists, such as Zilmax, are powering cattle futures higher as traders feel this will reduce the beef supply, especially if other packers follow suit.
- Traders continue to look for cash prices to rise compared to the $120 prices seen in the Plains last Friday. A strong showing in futures could prompt packers to lift their bids.
- The wholesale beef market is contributing to the strength with boxed beef prices rising yesterday on solid movement.
- Tempering bullish enthusiasm is news weekly beef export sales of 8,900 MT were down from 11,400 MT last week.
- Feeder cattle futures are higher on the strong gains in live cattle futures.
Lean hog futures are slightly higher.
- Lean hog futures are higher on spillover buying from cattle futures and short-covering from yesterday's weak close.
- Cash hog bids are steady to firmer as packers are working with positive cutting margins and need supplies through next week.
- The pork cutout value continues to strengthen, which is keeping packer margins solidly in the black and is supporting cash hog prices.
- Weekly pork export sales of 4,800 MT were down from 9,600 MT last week.