Corn futures are mostly 3 to 4 cents higher this morning.
- Corn futures are benefiting from light short-covering this morning on ideas the downside has been overdone. But buying strength is lacking as traders view current and expected weather conditions as favorable for crop development..
- The call for continuing below-normal temperatures and normal to above-normal precipitation across much of the Corn Belt in the 10-day weather forecast continues to reduce trader crop concerns.
- USDA's weekly crop ratings showed no change, with 63% of the crop rated "good" to "excellent." But when plugged into the weighted Pro Farmer Crop Condition Index (0 to 500 point scale), the corn crop dropped 1 point.
- South Korean feed makers continue to buy corn on the price drop, but the Black Sea region remains the origin of choice due to lower prices than U.S. supplies. South Korea bought another 50,000 MT of Black Sea origin corn overnight.
- Gulf corn basis is unchanged in early morning trading.
August soybeans are fractionally lower, while deferred months are mostly 3 to 4 cents lower this morning.
- Old-crop soybean futures started pit trade higher on short-covering and new-crop futures were lower on favorable weather forecasts. But all contracts have slipped as bears remain in full control.
- New-crop futures had gained mild support from USDA's weekly crop conditions ratings that showed a 1-percentage-point drop in the "good" to "excellent" categories for soybeans. Traders expected crop ratings to be unchanged. When USDA's ratings are plugged into the weighted Pro Farmer Crop Condition Index (0 to 500 point scale), there was also a 1-point decline.
- But that support has been trumped by weather forecasts that are viewed as favorable for crop development. Forecasts call for below-normal temps and above-normal precip through the 10-day window. Traders continue to shrug off concerns the delayed crop needs an extended fall in order to reach maturity.
- USDA announced a daily sale of 290,000 MT of soybeans to an unknown destination for 2013-14, but this is being ignored.
- Gulf soybean basis collapsed by 65 cents for immediate delivery this morning, but is steady for first-half August through November delivery.
SRW wheat futures are 8 to 11 cents higher, HRW is 6 to 9 cents higher and HRS is 3 to 7 cents higher.
- SRW futures are leading the way but all flavors are firmer amid short-covering and improved demand prospects.
- Japan announced it is officially lifting its ban on U.S. western white wheat and U.S. soft white feed wheat. Japan's weekly tender included 89,579 MT of U.S. western white wheat, the first tender for that "flavor" since late May.
- In addition to more Japanese demand, other global importers are stepping up purchases. Taiwan purchased a total of 97,200 MT of U.S. wheat in two separate tenders overnight.
- Talk of reduced grain quality from this year's SRW crop as late-season rains caused some sprouting may support demand for high-quality SRW supplies, but it's not typically a good thing when overall crop quality is poorer.
- Gulf SRW basis is unchanged in early morning trading.
August live cattle futures are slightly higher, while deferred contracts are slightly lower. Feeder cattle futures are mildly weaker.
- Live cattle futures are marking time as traders wait for direction of the cash trade.
- Nearby live cattle futures are trading at a premium to the bulk of last week's cash trade, which limits buying interest. But traders are looking for a seasonal low in the cash trade, which limits selling interest.
- The box beef market has yet to give signs of a seasonal bottom as boxed beef prices were weaker Monday and movement was light. Packers will be reluctant to raise cash cattle bids if that trend continues.
- Showlist estimates are also higher this week, especially in Nebraska, where cash cattle prices were the strongest last week.
- Feeder cattle futures are modestly lower on the slight gains in corn futures.
Lean hog futures are slightly to sharply lower.
- Lean hog futures are seeing selling pressure as traders anticipate both kill numbers and average weights to rise seasonally. However, October futures already reflect a $17 discount to the cash index and the August is about $4 under the cash.
- Cash hog bids are steady to weaker this morning as packers still face negative cutting margins.
- Packers have gotten a little relief from the recent gains in pork cutout values. But traders are looking ahead to the anticipated seasonal rise in supplies and downswing in prices.