Corn futures have turned slightly weaker following mixed trade earlier.
- Corn is seeing spillover pressure from soybean futures. Strength in the U.S. dollar is also weighing on corn futures.
- Lackluster demand is also price-negative. Gulf corn basis is mostly flat this morning.
- Traders will be hesitant to add long positions too far ahead of Friday's USDA reports. Traders look for USDA to raise the size of the corn crop slightly from last month and to lower its export projection.
Soybean futures are 10 to 12 cents lower through the July contract. Far-deferred contracts are mostly firmer.
- Most soybean contracts are being pressured by improved weather in South America. Weekend rains were seen in central and eastern Brazil this weekend and more rains are forecast for these areas this week. Meanwhile, drier conditions are expected in southern Brazil and central Argentina.
- Additional pressure is coming from strength in the U.S. dollar index.
- Traders will also be focused on evening positions ahead of Friday's key USDA Crop Production Report, which is expected to show an increase in crop size from last month.
Wheat futures are mostly 3 to 6 cents higher, although far-deferred contracts are mixed in Kansas City.
- Wheat is being supported by crop concerns, as traders look for this afternoon's crop condition ratings from USDA to reflect stress on the HRW wheat crop.
- Australia's largest exporter, CBH, lowered its estimate of the Western Australia crop to a range of 8.5 MMT to 9.3 MMT. They previously pegged the crop between 9.1 MMT to 9.3 MMT. Meanwhile, untimely late-season rains are threatening yields and crop quality in eastern Australia.
- Strength in the dollar is also weighing on futures as traders recognize U.S. wheat is not competitively priced on the global market.
Live cattle futures are under light pressure to start the week.
- Concerns the boxed beef market will face more price pressure after sharp losses last week is weighing on live cattle futures.
- If the product market does face more pressure, packers will be reluctant to pay any better than steady prices compared with last week's $126 to $127 trade in the Plains.
- Negative outside markets will limit buying in cattle futures to short-covering. Traders remain concerned the East Coast recovery efforts will slow beef demand.
Lean hog futures opened with a mixed tone, but have softened.
- The cash hog market is steady to lower as packers are well bought ahead on slaughter needs for the week and market-ready supplies are plentiful.
- Weakness in the cash market is weighing on lean hog futures, although selling interest in the December contract is limited by the discount it already holds to the cash market.
- Traders are also concerned meat demand will be hurt by the struggles on the East Coast.