Corn futures are choppy this morning; they are currently favoring a firmer tone.
- Look for two-sided trade to continue as traders focus on evening positions ahead of tomorrow morning's Crop Production and Supply & Demand Reports. According to the average pre-report trade guess, traders look for the crop to come in near 10.4 billion bu. and for 2012-13 carryover to tighten to 618 million bushels.
- Gulf corn basis has surged for near-term delivery, signaling tight supplies.
- Limiting buying is a record-fast start to corn harvest, which was 15% complete as of Sunday.
Soybean futures are mostly 4 to 8 cents lower on profit-taking and pre-report position squaring.
- Traders are evening positions ahead of tomorrow's key USDA reports. According to the average pre-report trade guess, a crop of 2.638 billion bu. is expected and traders look for 2012-13 carryover to be a very tight 106 million bushels.
- Yesterday's crop condition report showed slight improvement in the crop, with harvest off to an early start at 4% complete.
- Gulf soybean basis is steady this morning.
Chicago wheat is narrowly mixed, with Kansas City and Minneapolis firmer amid tightening global supplies.
- Light support is coming from ABARES lowering its wheat crop estimate to around 22.5 million metric tons (MMT), although it says the supply of wheat available for export "will remain high."
- Traders are also working to even positions ahead of Wednesday's Supply & Demand Report from USDA. Traders look for USDA to raise 2012-13 wheat carryover by around 11 million bu. to 709 million bushels.
- Traders are waiting on results from the Egyptian wheat tender. The country has recently favored purchases from the Black Sea region as they are tightening and U.S. supplies are not as competitively priced.
Live cattle futures are expected to see a mixed start as traders watch cash signals.
- The beef market is off to a mixed start for the week. Choice values rose 59 cents yesterday and Select was down $1.02 on relatively slower movement of 151 loads.
- This week's cattle showlist is smaller than last week, which gives feedlots more bargaining power and raises optimism for steady to firmer cash cattle trade this week.
- Tightening market-ready supplies are limiting selling in live and feeder cattle futures.
Lean hog futures are called to open steady to lower on continued cash deterioration.
- The cash hog market is expected mostly 50 cents to $1 lower this morning amid plentiful supplies. Cash sources say this week's kill is on pace to set a record for September.
- Pork cutout values were 2 cents lower yesterday. Thanks for sharp pressure on the cash market and stabilizing pork cutout values, packers are willing to keep kill lines running full as margins are well in the black.