Corn futures are mixed, with the September through July contracts 4 to 5 cents higher.
- News of the worst pest infestation in a decade has renewed concerns about the Chinese corn crop. Its ag ministry says 10% of the crop is under attack from army worms. The China National Grain and Oil Information Center cuts its estimate of the 2012 crop to 197 million metric tons (MMT) from 197.5 MMT.
- Meanwhile, the EPA is under growing pressure to ease the Renewable Fuels Standard mandate due to the drought-stricken corn crop. Governors from Arkansas and North Carolina joined the growing list of those seeking a reduction to the mandate.
- Gulf corn basis is steady to weaker as supplies from the South are more readily available.
Soybean futures are 7 to 11 cents higher on short-covering and tight supplies.
- Sources say sales of South American soybeans are winding down as supplies tighten, but export sources say purchases by China will slow in the coming months. Focus in the market has shifted to demand as the smaller crop is largely factored in by the market.
- Upside potential should be limited by forecasts for milder temps beginning tomorrow and extending into next week across the Corn Belt, as well as some showers today and tomorrow.
Wheat futures are enjoying slight gains at all locations.
- Wheat futures continue to watch the corn market for direction, as it remains in a follower's role. Buying interest in wheat futures is being limited by strength in the U.S. dollar index.
- SovEcon lowered its 2012 Russian grain crop forecast to a range of 70 MMT to 74 MMT from 72 MMT to 75 MMT previously, although no changes were made to its wheat crop estimate.
- Algeria has purchased 500,000 metric tons (MT) of durum, turning mainly to Canada, providing another reminder U.S. prices are not as competitive on the global market.
Live cattle futures are called to open higher as traders prepare for higher cash trade.
- Continued strength in the beef market has traders looking for $1 to $2 higher cash cattle trade compared to last week's $119 to $120 trade.
- Choice boxed beef values rose another $2.32 yesterday and Select was up $2.42. But movement has slowed at higher prices, as only 151 loads changed hands.
- Feeder cattle are called lower in reaction to higher corn prices, although feeder futures have signaled a near-term low has been posted.
Lean hog futures are expected to be weaker on concerns about the cash market.
- Lean hog futures are called lower based on lackluster demand for cash supplies by packers. While packers' profit margins have returned to the black, they are having no difficulty securing supplies.
- Pressure on nearby lean hog futures should be limited by the hefty discount those contracts hold to the cash index, which stands at $92.31.
- A Chinese trading firm says it sees the country's pork imports from the U.S. rising around 29% this year. According to the analyst, total pork imports from the U.S. this year may reach 620,000 metric tons.