Corn futures have slightly backed off earlier lows to trade 6 to 7 cents lower.
- Followthrough pressure from a poor close Friday and heavy spillover from the soybean market is weighing on corn futures this morning.
- Futures are retreating after strong gains following last Thursday's Crop Production and Supply & Demand Reports. The lack of followthrough buying signals traders aren't yet convinced short-term lows are in place.
- Traders remain hesitant to actively buy corn amid a lack of strong end-user buying. Export demand has slowed and Southeastern livestock and poultry producers are turning to cheaper South American supplies.
Soybean futures are trading mostly 16 to 24 cents lower, although slightly lesser losses are being seen in far-deferred contracts.
- Soybean futures are facing seasonal pressure amid better-than-expected yields. The harvest pace was active last week, but heavy weekend rainfall will slow harvest activity in some areas and more rains are in the forecast for this week.
- Traders are also expecting record soybean production in South America in 2012-13. Weekend rains in some of the soybean areas of Brazil will be beneficial, although more precip is needed. Rains in the seven-day outlook are expected to favor northern soybean areas. Conditions remain too wet across much of Argentina.
- Additional pressure is coming from technical-based selling as November soybean futures violated support at $15.04 and plunged below the $15 mark for the first time since July 5.
- China imported 4.97 MMT of soybeans in September, up 12.4% from August and 20.3% above year-ago. Through the first nine months of this year, China has imported 44.3 MMT of soybeans, a 17.7% increase from year-ago. With the price of state-owned soybeans in line with global prices, Chinese soybean imports are expected to remain strong.
- NOPA soybean crush for September came in about as expected at 119.732 million bu., which was down around 5 million bu. from August.
Wheat futures are mostly 1 to 3 cents lower in Chicago, with Kansas City and Minneapolis seeing mixed trade.
- Wheat futures are being pulled lower by spillover from corn and soybeans.
- Weekend rains were heavy across some areas of the Plains and Midwest. Given moisture deficits across much of U.S. winter wheat areas, the rains will help recently seeded acres emerge and encourage more active planting. This is adding to price pressure this morning.
- Iraq and Algeria each tendered for optional origin wheat. But the U.S. is unlikely to get any of the business as U.S. wheat is priced above other global suppliers.
- Outside markets aren't much of a factor so far this morning, but macro-economic headwinds are keeping investors from wanting to actively add risk.
Live cattle futures are expected to open with a steady to weaker tone. Feeder cattle are seen mildly favoring the upside.
- Cattle traders are likely to be cautious and active cash cattle trade may not be seen until late in the week as USDA's Cattle on Feed Report is out Friday morning.
- Cattle traders will closely monitor boxed beef trade as they form cash cattle opinions for the week. Cash cattle prices have risen the past two weeks as beef movement has been solid. But if retailer beef purchases slow, packer demand for cattle would likely wane given negative cutting margins.
- Feeder cattle futures are expected to favor a firmer tone on support from weakness in the corn market.
Lean hog futures are called to open steady to firmer.
- Lean hog futures have risen sharply from the summer lows, but there are some concerns the market may be nearing a short-term top. That's likely to limit buying interest as traders watch to see if demand continues to keep pace with supplies.
- Seasonally, market-ready hog supplies will build into year-end, which threatens to stall the price advance if demand wavers.
- Cash hog bids are expected to be mostly steady to open the week, although some firmer bids are possible given strong packer cutting margins.