Corn futures are choppy this morning, though a firmer tone is starting to develop amid corrective buying.
- Basis strength across the countryside and at the Gulf is supportive for September corn futures. But buying interest is being muted by overall negative attitudes.
- Those attitudes are being driven by what traders see as non-threatening weather. With below-normal temps and scattered rains expected through next week, the corn crop will continue to pollinate under non-stressful conditions.
- As a result, traders feel all is well with the corn crop and they are currently not worried with the holes in the western Corn Belt.
- Traders continue to wait on China to show up as a buyer of corn on the price break. Until export demand increases, buying interest in futures will be limited to mild short-covering.
August soybean futures are posting gains in the teens, while new-crop contracts are mostly 5 to 7 cents higher.
- August soybeans are being supported by a lack of deliveries and tight supplies as the two-week delivery process gets underway. There were also no deliveries against August soybean meal this morning.
- New-crop soybean futures are being supported by short-covering amid ideas the downside has been overdone. But buying interest will remain limited to corrective buying as attitudes are bearish and traders feel weather is beneficial to crop development.
- Forecasts call for the run of below-normal temps and rainfall chances to continue through at least the end of next week.
- USDA reported a daily sale of 120,000 MT of soybeans for 2013-14 to unknown destinations this morning. That follows a sale of 290,000 MT of soybeans for 2013-14 to an unknown destination on Tuesday. The pickup in demand signals new-crop soybeans have dipped to a "value" level.
SRW and HRW wheat futures are mostly 5 to 7 cents higher this morning. HRS futures started lower, but are beginning to firm on spillover supoort.
- Winter wheat futures continue to work on a post-harvest low. End-of-the-month positioning is also mildly supportive. While export demand is strengthening, much of the price strength is corrective in nature.
- Wheat futures are trying to separate from the corn and soybean markets, which are acting as an anchor. Unless the corn market actively participates in a move higher, the upside for wheat is limited to corrective buying.
- Forecasts that continue to call for what traders deem to be favorable conditions through the Northern Plains are limiting buying interest in HRS futures.
- Outside markets are having little impact on wheat so far this morning. The U.S. dollar is anchored near unchanged. Second quarter GDP came in stronger than anticipated, but traders are waiting on the conclusion of the Federal Open Market Committee meeting this afternoon.
Live cattle futures opened narrowly mixed this morning, but have mildly softened. Feeder cattle futures are mixed.
- Price action is light and choppy in live cattle as traders wait on direction from the cash cattle market. Traders are still hoping for firmer cash cattle prices, but August futures are trading at a premium to last week's cash trade in Kansas and Texas.
- Traders still have bullish cash cattle hopes, but bigger showlist numbers and sluggish boxed beef trade remain hurdles to getting packers to raise cash cattle bids.
- Boxed beef prices were mixed Tuesday, but more importantly, movement was light. Packers want to see a pickup in product movement to signal prices have dropped far enough to encourage stronger retailer demand.
- Feeder cattle are mildly firmer through the October contract and narrowly mixed from the November contract forward. Very little price direction is coming from either live cattle or the corn market so far this morning.
Lean hog futures are firmer this morning with the August contract leading gains.
- Ideas yesterday's losses were overdone are fueling corrective buying in lean hog futures this morning. Traders are also working to narrow the discount August hogs hold to the cash lean hog index.
- But the upside is limited to corrective buying as traders know a seasonal rise in hog and pork production lies ahead.
- Cash hog bids are steady at most Midwest locations after trading steady to weaker earlier this week.
- The combination of recent weakness in the cash hog market and strength in the pork cutout value the past five days has pushed packer margins solidly into the black. But packers aren't ready to raise cash hog bids yet.