Early gains in the corn market have given way to profit-taking. Futures are 7 to 9 cents lower.
- Corn futures initially benefited from disappointing rains this weekend and forecasts for dry conditions to continue this week across the Belt. Heat is also expected to build in the western and upper Midwest this week.
- The market expects the impact of last week's highly stressful conditions to be reflected in this afternoon's crop condition report. But this is seen as factored into prices and the market remains unconvinced that recent conditions will prevent a record corn crop.
- Strength in the U.S. dollar index is also encouraging profit-taking.
- Gulf basis fell 8 cents for September delivery this morning and 2 to 3 cents for October and November delivery, possibly signaling slower demand. This keeps concerns that high prices are curbing export demand in mind.
- This morning's export inspections data will give the market another measure of demand.
- The market is ignoring news China's ag minister said the country will "gradually increase" corn imports due to rising domestic demand.
Soybean futures have softened to trade mostly 14 to 25 cents higher.
- A drier-than-expected weekend following last week's heat and dryness along with a dry forecast for the week ahead are lifting the bean market as the crop is trying to fill pods. Heat is also expected to build outside of the eastern Corn Belt this week.
- Traders will receive an update on this as well as the condition of the crop this afternoon from USDA.
- Concerns about rising soybean prices limiting demand are not as big of a factor as in the corn market since last year's high prices did not have a major impact on demand.
- But futures did rein in gains after a failed test of last week's high for new-crop contracts.
Wheat futures have softened to trade roughly 5 to 7 cents lower for SRW and HRW contracts. HRS wheat is also 5 to 7 cents lower in most contracts.
- A pullback in the corn market encouraged light profit-taking in the wheat market.
- Also limiting buying enthusiasm is a strengthening U.S. dollar index due to unrest in Syria and the possibility of U.S. involvement.
- Dollar strength adds to concerns that U.S. wheat is not competitively priced globally. Supporting such ideas is news Egypt purchased 355,000 MT of Russian, Ukrainian and Romanian wheat over the weekend.
- The market will receive an update on spring wheat harvest this afternoon. Harvest-related hedge pressure is expected to ease once progress crosses the halfway point.
Live cattle futures are off to a mixed start with nearby contracts favoring the upside. Feeder cattle futures firmed as the corn market weakened.
- Cash cattle trade took place at mostly steady prices of $123 in Texas and Kansas last week. The October contract is at a $4 premium to the cash market, signaling traders view near-term cash prospects as friendly.
- Demand typically picks up as temps cool into fall. Plus supplies are expected to tighten going forward.
- But the boxed beef market has failed to impress of late, giving rise to ideas consumers may resist historically high beef prices.
- On Friday, Choice boxed beef cuts fell 4 cents and Select declined 54 cents; movement was also light at 140 loads.
Lean hog futures are choppy this morning with nearby contracts mildly favoring the downside.
- There are some ideas the cash market could soon rebound as last week's heat wave could be reflected in hog weights this week. Plus, high temps are expected to return to much of the Midwest again this week. Early cash hog bids are steady this morning.
- Packers usually increase processing schedules following Labor Day, and they continue to enjoy wide profit margins.
- Nearby futures are at a nearly a $6 discount to the cash hog market, which is also helping limit selling interest.
- But producers will be working to get current on marketings to start the week.
- The pork cutout value slipped $1.87 on Friday and movement was light at 281.3 loads.