Corn futures continue to post gains of mostly 1 to 3 cents.
- While the building heat and dryness in Argentina is getting more attention in the soybean market, it could have a greater impact on corn production. Not all of Argentina's corn acres are seeded yet and it's getting very late (equivalent to mid-July) in the United States. Late-season rains will be needed for a strong crop finish.
- There continue to be rumblings Argentina will cap corn exports, although no official announcement has been made. These rumors have been swirling through the market the past two days.
- Gulf basis for nearby delivery is steady to weaker, but basis for spring delivery to the Gulf is steady to firmer.
Soybean futures have extended gains to trade mostly 7 to 15 cents higher.
- Developing heat and dryness in Argentina is drawing more market attention. Private crop estimates are declining, with Pro Farmer South American consultant Dr. Michael Cordonnier cutting his forecast by 1 MMT to 53 MMT this week.
- Meanwhile, conditions are generally favorable in Brazil and the country is on its way to record soybean production.
- Soybean basis is steady to weaker, but recent commercial buying suggests there may be some fresh export business on the horizon.
Wheat futures are maintaining most of their earlier gains. Chicago wheat remains mostly 5 to 6 cents higher, while Kansas City wheat is 4 to 5 cents higher and Minneapolis wheat is 3 to 5 cents higher.
- Dryness concerns in the U.S. Plains remain a supportive factor for wheat futures, especially after winter wheat seedings were lower than expected. The 10-day forecast offers little hope of any significant precip for the region.
- Global crop concerns are also supportive as traders fear winterkill issues could trim Russian production.
- The demand front is a limiting factor, however. U.S. wheat is not competitively priced on a consistent basis, therefore limiting the odds the U.S. will garner any major tenders.
- Also, India plans to keep exporting wheat as it cleans out storage space. Indian officials say the county plans to export 10 MMT of government wheat stocks.
Live cattle futures are expected to open with a weaker tone. Feeder cattle futures are also seen opening under light pressure this morning.
- The premium live cattle futures hold to the cash market as traders wait on cash cattle trade to develop is expected to weigh mildly on the market this morning.
- There are also some demand concerns as the post-holiday timeframe is typically a slow period for beef demand. Boxed beef movement has been slow the first two days this week, adding to the demand concerns.
- The supply front is bullish, however, which should limit selling interest and keep live cattle futures at a comfortable premium to the cash market.
- Strength in the corn market will help feeder cattle, but an expected lack of buying in live cattle will limit buying interest in feeders.
Lean hog futures are expected to open with a mixed tone this morning.
- With nearby lean hog futures at just a slight premium to the cash market, light and choppy price action is likely in futures.
- Cash hog bids are called mostly steady, although mixed undertones are likely given varied packer demand. Some firmer bids are expected in western locations while eastern areas are expected to favor a softer cash tone.
- Packer cutting margins remain in the red, but are improved after a 34-cent gain in the pork cutout value yesterday. Packers also moved a strong 123.71 loads of pork yesterday, which could improve demand for cash hogs in some areas.