Corn futures are posting losses of mostly 2 to 5 cents this morning.
- The forecast lacks threatening heat, which the market is giving a "non-threatening" read.
- Plus, the 6- to 10-day forecast from the National Weather Service calls for below-normal temps and above-normal precip from Iowa into the eastern Corn Belt.
- But the driest first half of July in nearly 40 years following the wettest May and June on record for Iowa means the crop itself tells a different story.
- USDA announced another 120,000-MT corn sale to unknown destinations this morning, signaling softer prices have improved export demand.
- Strength in the U.S. dollar index is giving bears a slight edge as well.
Soybean futures have erased early losses and rallied 24 cents higher in the front-month contract and roughly 6 to 9 cents higher in deferred contracts.
- Early pressure was seen as a bargain buying opportunity to start the week amid signs of improved demand.
- The slow development of the bean crop is also beginning to get some attention. USDA will provide an update on this at 3:00 p.m. CT today.
- Somewhat offsetting this, however, is a cooler, wetter 6- to 10-day forecast than indicated Friday.
- Bulls were also encouraged by the November contract's ability to bounce off support in the $12.50 area.
- Somewhat tempering buying enthusiasm is news China's second quarter GDP came in at 7.5% growth, which was in line with expectations but down 0.2 percentage points from the previous quarter. This raises demand concerns going forward.
Wheat futures are down 9 to 10 cents in Chicago and 8 to 10 cents in Kansas City; Minneapolis wheat is 7 to 8 cents lower.
- Traders are booking some profits to start the week, encouraged by strength in the U.S. dollar index and spillover from the corn market.
- Also, the market needs a steady stream of demand news to maintain gains. This is lacking today and the market is concerned China's recent buying binge is over.
- But China National Grain & Oils Information Center projects the country's imports will total 5 MMT, up 73% from year-ago.
- And 2013-14 world wheat ending stocks are now expected to decline from year-ago, despite projections for bumper crops in Europe and the Black Sea region.
Live cattle futures are posting slight gains in early trade. Feeder cattle futures are sharply higher.
- Live cattle futures are off to a better-than-expected start thanks to ideas supplies will tighten going forward, helping the cash market to improve.
- Late last week, cash cattle trade took place at steady prices of $119, whereas steady to lower trade was anticipated. The market appears to have friendly cash cattle expectations as traders are extending the $3-plus premium the front-month contract holds to these prices.
- While Choice and Select boxed beef cuts fell on Friday and last week, movement has improved as softer prices have spurred improved retailer buying.
- Softer corn prices and a firm tone in live cattle are lifting feeder cattle futures.
Lean hog futures are posting slight to moderate gains to start the week.
- Ideas the downside was overdone last week are lifting lean hog futures today.
- The pork cutout value rose 53 cents Friday, though movement slowed to 288.2 loads.
- Also, nearby futures remain at a discount (slight for the front month, but wide for the August contract) to the cash hog index. July hogs expire at noon CT today.
- Cash hog bids are steady to weaker today as most plants are well supplied for near-term needs. Recent pork product market declines have pulled packer cutting margins back into the red.
- Warmer temps are tightening market-ready hog supplies.
- But a heat wave also raises pork demand concerns.