Corn futures have reversed early gains to trade double-digit lower in most contracts.
- Corn futures are facing profit-taking pressure after failing to push through key resistance on earlier price strength. Technical-based selling is weighing heavily on the market.
- Traders are readying for this afternoon's crop progress update from USDA, which traders expect to show limited corn planting progress last week. But the market is disregarding the fact that some of the planted corn has been drowned out and will need to be replanted and that much of the remaining unplanted acres are in key production regions.
- The forecast calls for more heavy rains in the Upper Midwest Tuesday through Thursday, which will halt planting efforts after some producers briefly return to fields.
- Meanwhile, a 1- to 2-cent slide in Gulf basis for June delivery raises concerns about slowed demand for old-crop corn.
Soybean futures have reined in early gains but remain mostly 12 to 15 cents higher.
- Traders are focusing more so on expectations for this afternoon's crop progress update to reflect slow soybean planting progress than on the likelihood some corn acres will be switched to soybeans due to corn planting delays.
- Also, a rise in China's official purchasing managers' index (PMI) in May is seen as favorable for the country's soy demand, though the country's final HSBC PMI fell to its lowest level since October 2012.
- Soybean basis strength keeps tight old-crop supplies in focus.
Chicago and Kansas City wheat futures are mostly double-digit lower. Minneapolis wheat is mixed on bull spread unwinding.
- Spillover pressure from the corn market and ongoing unease about the U.S. GMO wheat situation are pressuring wheat today.
- However, initial tests by South Korea's Ministry of Food and Drugs found no evidence of GMO content in U.S. wheat shipments.
- This afternoon's crop progress update is expected to reflect ongoing spring wheat planting delays, and these will continue this week if the wet, cool forecast plays out as expected.
- The Southern Plains HRW wheat crop is expected to benefit from isolated showers.
Live and feeder cattle futures are slightly to moderately lower, with nearby contracts leading losses for live cattle.
- Traders are taking advantage of last week's gains by booking some profits as they await cash clues for this week.
- Last week, cash cattle trade took place at mostly steady prices of $124 in the Southern Plains and $125 in northern locations. Futures are still at a $3-discount to these prices, signaling lingering beef demand concerns.
- While the boxed beef market has given signs a near-term top is likely in place, prices remain historically strong and above previous record highs. Boxed beef movement since Memorial Day continues to indicate consumers have accepted high beef prices.
- But traders are giving the $1.90 slide in Choice boxed beef values and the $1.89 decline for Select cuts more attention to start the week.
- Packers are enjoying wide profit margins, which could make higher cash trade on tightening supplies and overall beef market strength more likely this week.
- Spillover pressure from live cattle is weighing on feeders. The market has not yet actively reacted to the reversal in corn.
Lean hog futures are off to a narrowly mixed start.
- While supplies are tightening seasonally, a pullback in the pork market Friday raises demand concerns.
- The pork cutout value slid 76 cents Friday and movement slowed to 292.8 loads. This raises concerns that the chilly, wet start to summer grilling season could be slowing grilling demand.
- Therefore, packers are keeping cash hog bids mostly steady this morning.
- Also limiting buying interest, the front-month contract is at around a $1.50 premium to the cash index.