Corn futures are off to a mixed start, with the July contract up 2 cents and deferred contracts mostly 2 to 4 cents lower.
- Friday's reports continue to encourage bull spreading in corn, with tighter-than-anticipated corn stocks lifting old-crop futures.
- But USDA's surprising increase in planted corn acres from its March intentions report are pressuring new-crop corn. This has eased concerns about the poor start to the growing season in states such as Iowa and Minnesota.
- Traders will receive an update on crop progress and condition from USDA later today.
- Also, the near-term forecast is seen as favorable by traders as the western Corn Belt is expected to be drier while the eastern Belt is receiving beneficial rains.
Soybean futures are 2 to 6 cents higher in old-crop contracts, while new-crop is 4 to 7 cents lower.
- USDA's grain stocks and acreage data are also encouraging bull spreading in the bean market to start the week and the month. Strong early gains in old-crop contracts have encouraged some profit-taking, however.
- The Quarterly Grain Stocks Report showed supplies as of June 1 were tighter than the market had anticipated.
- But USDA also raised its soybean planted acreage estimate from March intentions, though the increase was less than anticipated. USDA plans to resurvey 14 states for planted soybean acreage, but that information will not be available until the August Crop Production Report.
- A generally favorable forecast for the Midwest this week is adding light pressure to new-crop beans.
Wheat futures are mostly 2 to 3 cents lower in Chicago and mixed at other locations with Kansas City favoring the upside and Minneapolis the downside.
- Rainy weather in the eastern Corn Belt is slowing harvest and raising quality concerns, limiting selling interest.
- But better-than-expected harvest results in some areas of the Southern Plains is also limiting buying interest.
- Harvest-related hedge pressure will likely continue to weigh on the wheat market until at least half the crop is cut. USDA will provide an update on that this afternoon.
- Friday's reports were mixed for the wheat market, as they reflected stronger-than-expected quarterly wheat usage, but also more planted spring wheat acres than traders expected.
Live cattle futures slightly higher this morning, while feeder cattle futures are enjoying slight to moderate gains.
- Traders are engaging in some light short-covering in the live cattle market after losses Friday.
- The market is on watch for signs that a seasonal low is in place -- namely strength in the boxed beef market -- after moderately active cash trade took place at steady prices of $120 last week.
- August futures hold a $2 premium to those cash prices, confirming such ideas. But if the boxed beef market does not impress, traders may quickly remove this premium.
- Mixed boxed beef prices and just very light movement of 111 loads Friday has some concerned demand could soften following the Fourth of July.
- Feeder cattle futures are benefiting from Friday's acreage data that showed much higher corn plantings than anticipated, easing recent concerns about the impact of wet, cool weather on the 2013 corn crop.
- Strong gains in the stock market after May construction spending data came in near a four-year high is also giving bulls an edge.
Lean hog futures got off to a firmer start, but this has since given way to light profit-taking. Futures are slightly lower.
- Friday's Hogs & Pigs Report came in near in line with expectations and therefore, there's limited market reaction.
- The cash hog market is mostly steady this morning as a few plants are still in need of loads this week, despite it being a holiday-shortened kill. Wide margins and solid demand are helping to keep the cash market steady.
- But traders are also on watch for a top in the pork cutout market. The pork cutout value rose 53 cents Friday, though movement slowed to 215 loads.
- July hogs are trading at a $2-plus discount to the cash hog index. But as the index has been on the decline, traders are not feeling pressure to narrow this discount.