Corn futures have softened and are trading 3 to 8 cents lower.
- Corn traders are taking profits following recent, strong gains. But selling interest is limited as crop concerns remain amid the persistent drought.
- Yesterday's crop condition report showed a slowed pace of deterioration, as USDA lowered the portion of crop rated "good" to "excellent" by two percentage points -- slightly less than traders excepted.
- Gulf basis is steady to weaker this morning to suggest the runup to historic prices is slowing export demand.
- There are also signs high prices are curbing feed and ethanol demand.
Soybeans have backed off earlier highs to trade narrowly mixed.
- Despite declining crop condition ratings and falling private crop estimates, soybean futures are taking a breather from recent gains as traders take some profits out of the market.
- Yesterday's crop condition report showed 29% of the crop in "good" to "excellent" shape -- down by two percentage points -- which was about as expected. With hot temps and limited rainfall forecast for the next two weeks, traders anticipate further crop deterioration at a time when the crop is trying to set and fill pods.
- Gulf basis is steady to lower for immediate delivery this morning on reduce export demand.
Wheat futures are posting losses in the teens in most contracts at all three exchanges. Far-deferred futures are mixed.
- Profit-taking pressure has developed given a lack of buying interest in the corn market. Despite global crop concerns, especially in the Black Sea region, wheat remains reliant on corn for price support.
- Russia's ag ministry lowered its estimate of the 2012 grain crop to 80 million metric tons (MMT) from the previous range of 80 MMT to 85 MMT and Interfax news agency says the ministry may cut its outlook to 75 MMT if drought persists. Despite the reduced crop prospects, Russia's prime minister says the country will retain its grain exportable surplus.
- With spring wheat harvest in full swing and given the recent sharp runup in prices, Minneapolis wheat futures are facing seasonal hedge pressure.
- Jordan purchased 100,000 metric tons (MT) of wheat -- likely Black Sea region.
Live cattle futures are under light pressure in early trade. Feeder cattle are mixed.
- Live cattle futures are being mildly pressured by the $5-plus premium they hold to last week's cash trade.
- While overall showlist supplies are up from week-ago in the Plains, traders are hopeful the cash cattle market can build on last week's gains. But packer margins have tightened to near breakeven, which could limit their willingness to raise cash bids.
- Feeder cattle are narrowly mixed. While there are concerns about reduced feeder cattle demand given rising feed prices, mild weakness in the corn market this morning is limiting selling interest in feeders.
Lean hog futures are narrowly mixed in light and choppy trade.
- August lean hog futures are being pressured by weakness in the cash hog market. But futures are trading at a discount to the cash index, which is limiting selling interest.
- Cash hog bids are steady to $1 lower across the Midwest. A sluggish performance in the pork product market has reduced packer demand for hogs as marketings are expected to increase this week and plants continue to deal with negative margins.
- Traders expect sow slaughter to pick up amid surging feed prices. That would increase the near-term pork supply, but limit hog numbers next year.