Corn futures are mixed on bull spreading. Nearbys are 2 to 5 cents higher and new-crop contracts are marginally lower.
- Forecasts for above-normal temps by the weekend raise concerns about a shallow-rooted corn crop as atmosphere is also turning drier. But new-crop futures are seeing light profit-taking ahead of midday.
- Support in the July and September contracts is coming as traders look for a continuation of tight carryover supplies in Thursday's Supply & Demand Report.
- Selling interest in the December seems to be limited as the market has found value buying in the $5.00 area.
- USDA announced this morning China purchased 120,000 MT of new-crop U.S. corn, adding to ideas prices have found value.
- Gulf basis is unchanged in late-morning trading after slipping 1 cent for first-half July delivery, while August delivery firmed a penny in early trading.
Soybean futures are 5 to 13 cents higher amid bull spread unwinding.
- A shift to a drier, less favorable forecast is prompting new-crop futures to firm in late morning trading. The 6- to 10-day forecast calls for heat over much of the Corn Belt, which is concerning for a slow-developing crop.
- Signs of ongoing strong Chinese demand are also supportive. The country imported a record 6.93 MMT of soybeans in June, which is up 36% from the previous month and 23% higher than a year-ago, as South American supplies became more readily available.
- Somewhat offsetting this, however, is disappointing Chinese trade data last month. Exports declined by 3.1% from year-ago.
- The market is also looking ahead to USDA's Supply & Demand Report tomorrow, in which USDA is expected to trim old-crop carryover 4 million bu. to 121 million bushels. The market expects USDA to raise new-crop carryover by 5 million bu. from June to 270 million bushels.
- Gulf soybean basis is unchanged in late-morning trading after falling 4 cents for immediate delivery, firming 3 cents for second-half July delivery, and rising 3 to 5 cents for September delivery in early morning trading.
Wheat futures are mostly 2 to 4 cents higher, with the exception being the front-month Chicago and Kansas City contracts that are weaker.
- Wheat futures have moved higher on spillover from soybeans after seeing light profit-taking in early trading.
- The market is finding support from recent strong SRW wheat buys in excess of 1.3 MMT by China. There is some concern about slowed demand after recent price improvement.
- Meanwhile, harvest pressure has eased as HRW wheat harvest is in its final days across Kansas. Yields were not as bad as some had feared, but remained variable.
- The market is also beginning to ready positions for tomorrow's USDA reports. Traders look for USDA to tighten 2013-14 carryover from last month to 624 million bushels. Traders also look for USDA to trim its all wheat crop peg from 2.08 billion bu. last month to 2.057 billion.
- Gulf basis is unchanged in late-morning trading.
Live and feeder cattle futures are modestly weaker at midday on profit-taking.
- Futures are correcting somewhat after yesterday's bullish reversal. Bulls are disappointed on the lack of follow-through buying.
- The boxed beef market continues to look for a low. Choice beef is down 62 cents at $193.70 but Select is up 36 cents at $186.21. Morning movement, however, is a strong 160 loads.
- Traders continue to wait for the cash market to post a low. August futures remain at nearly a $4 premium to the bulk of last week's cash action.
- Cash cattle trade is expected to be delayed until later in the week. This week's tighter showlist gives feedlots more bargaining power.
- Feeder futures continue to keep a close eye on the corn market, which is choppy today.
Lean hog futures continue to trade moderately higher.
- Short-covering continues to be the dominate feature today with weakness in the U.S. dollar index and thoughts the downside has been overdone recent contributing to the gains.
- The wholesale pork market is not contributing to the rise as it declined $2.41 this morning. Movement has been strong, though, at 238.7 loads.
- The drop in pork cut values has further tightened packers' profit margins. The cash market is steady to lower today amid lighter demand for supplies.
- July futures continue to trade at more than a $1.50 discount to the cash index, and August futures are more than $7 below the index. That support provides some support to futures.