Corn futures got off to a choppy start, but have turned lower. September corn is double digit lower with the rest of the market 1 to 3 cents lower.
- Weather concerns initially encouraged light short-covering in the corn market, but this has dissipated.
- Buying interest remains tempered by concerns demand will slow if prices rise, as was the case in last week's export sales report.
- Also raising demand concerns, Gulf basis fell 8 cents for immediate delivery and it slipped a penny for November through January delivery.
- Record-setting heat is forecast for the Corn Belt today and tomorrow. While temps are expected to moderate the rest of the week, heat and dryness are in the 6- the 10-day outlook from the National Weather Service and much of the Midwest is expected to remain dry.
Soybean futures have seen two-sided trade today, but bears have taken control. Futures are 3 to 6 cents lower in all but the front-month contract, which is 20-plus cents lower.
- Traders started the session building more weather premium into prices as they see the bean crop as more vulnerable to heat and dryness. But this has given way to light profit-taking as traders start to prepare for Thursday's September crop reports from USDA.
- This is also expected to result in another decline in USDA's crop condition rating today.
- The market also expects USDA to lower its production estimate in its Crop Production Report Thursday due to a poor end to the growing season.
- According to official Chinese trade data, the country imported 6.37 MMT of soybeans in August, which is 44.1% higher than year-ago. For the first eight months of the year, Chinese soybean imports are up 4.4% over 2012.
SRW wheat futures are mostly 6 to 8 cents lower while HRW and HRS are seeing slightly lighter losses.
- As the corn market softened, so did wheat futures.
- Favorable precip in the forecast for the Southern Plains is adding pressure as it points to improved planting conditions for the winter wheat crop.
- Traders will receive an update on spring wheat harvest this afternoon.
- The market continues to weigh concerns about stepped-up export competition overseas, especially in the Black Sea region, against recent solid export sales and export inspections reports. Traders will take note of this morning's export inspections report to gauge demand.
Live cattle futures are narrowly mixed this morning. Feeder cattle futures are posting slight to moderate losses.
- Last week, cash cattle trade took place at mostly steady prices of $123 in Texas and Kansas, while Nebraska saw steady to lower trade at $122 to $123.50. Steady trade in the Southern Plains was anticipated.
- Supplies are expected to tighten going forward. Traders will watch this week's showlist estimates for indications as to this week's cash action.
- October futures are already at a $2 premium to the cash market, limiting buying interest.
- Beef demand concerns linger as the boxed beef market softened both in terms of prices and movement Friday. Earlier in the week, movement was strong amid mixed prices.
- Outside markets are supportive today as the U.S. dollar index is under pressure and the stock market is reflecting solid investor risk appetite to start the week.
- Concerns about the size of this year's corn crop are pressuring feeder cattle futures despite a weaker tone in corn futures this morning.
Lean hog futures are off to a mixed start this morning.
- The seasonal tendency is for prices to soften as hog supplies build into fall. But extreme heat in the Midwest early this week following hot weather the past two weeks has upset this seasonal tendency and led to atypical strength in the cash market.
- The cash hog market is steady to higher as packers work to fill in slaughter runs.
- Pork demand coming out of the Labor Day holiday has been strong. On Friday, the pork cutout value firmed 35 cents on decent movement of 309 loads.
- But recognition that a shift back to the norm is likely ahead is limiting buying interest in futures.
- The technical posture of the market still favors market bulls, as does weakness in the U.S. dollar index today.