Corn futures have extended early gains to trade 24 to 33 cents higher with December futures leading the charge.
- Weather concerns continue to propel corn futures. The Corn Belt is expected to see near-record temps this week and a heat dome is expected to keep precip out of the Belt. Midday weather updates confirmed this pattern.
- This is especially concerning considering that drought was already in effect for much of this region and scouts on the Pro Farmer Midwest Crop Tour last week noted dry soils yield-limiting tipback in many states.
- Hot temps are expected to continue over the 6- to 10-day outlook, though there are above-normal rain chances for parts of the northern and eastern Corn Belt.
- Spillover support from the soybean market is adding to bullish enthusiasm.
- Weekly corn export inspections of 12.010 million bu. met expectations and rose 4.846 million bu. from the week prior.
- Gulf basis slid 2 cents for September delivery and held steady for other months at midday, possibly signaling increased farmer sales.
Soybean futures are enjoying gains of 57 to 62 cents through the January contract, while deferred months are seeing gains mostly in the 30s to 40s.
- The forecast for hot, dry conditions in the Corn Belt this week and expectations for heat to continue over the next 10 days is causing soybeans to surge this morning.
- Pro Farmer's crop production estimate of 3.158 billion bu. came with the caveats that near-perfect weather will be needed for the crop to hold onto this potential since the crop has more downside risk than upside potential.
- Current and expected conditions are far from ideal and will likely result in pod abortion.
- USDA will provide an update on the condition of the soybean crop this afternoon.
- Strong basis levels reminds of tight supplies. Gulf basis held steady at midday.
- Soybean export inspections of 2.461 million bu., while not impressive, did match expectations.
- Traders are not concerned that Agroconsult expects Brazil's 2013-14 soybean crop to reach a record 88.4 MMT, as the crop has not yet been planted.
Wheat futures have firmed to post gains in the upper 20s to low 30s for SRW wheat. HRW and HRS are also enjoying 20-plus cent gains.
- Spillover support from corn and soybeans is lifting the wheat market today.
- Weekly wheat export inspections of 31.192 million bu. topped expectations and represents strong demand for U.S. wheat, despite concerns about increased export competition. Inspections for 2013-14 are running 30.6% ahead of year-ago, whereas USDA forecasts exports to be up 9.2% for the year.
- Frost concerns for Argentina's wheat belt is adding to the positive tone.
- Buying enthusiasm in the HRS market is being curbed by ongoing spring wheat harvest. The market will receive a progress update from USDA this afternoon.
Live cattle futures are steady to moderately higher at midday. Feeder cattle futures are moderately to sharply lower.
- Friday's Cattle on Feed Report came in on the bullish side of expectations for all categories, with Placements well below expectations at 90% of year-ago.
- But strong gains in the grain markets are tempering the bullish reaction.
- Futures are trading in line with last week's cash cattle trade at steady prices of $123 on the Southern Plains. Light cash trade last week could lead to higher showlist estimates this week, however.
- The boxed beef market is off to an unimpressive start this morning, with Choice cuts down 50 cents and Select 87 cents lower. Movement was also light at just 66 loads.
- Strong gains in the corn market have pushed feeders lower.
Lean hog futures continue to post slight to moderate gains at midday.
- Corrective short-covering and followthrough buying after some contracts posted bullish reversals Friday are supporting lean hog futures.
- Also, while the cash hog index has recently slid sharply, it is still more than $11 above the October futures price.
- There is also some concern about hot Midwest temps this week that are expected to continue into the week ahead. This will limit hog weight gain and could discourage hog transportation.
- Nevertheless, cash hog bids are mostly steady to lower today as packers are bought ahead on near-term needs.
- The pork cutout value slid $1.06 this morning on light movement of 153.6 loads.