CORN AND SOYBEAN PRODUCERS: FINISH OLD-CROP CASH SALES...
Fundamentals are still very strong for the corn and soybean markets, but basis has peaked and futures are signaling tops may be in place. With old-crop cash prices at historic levels, it's time to sweep the bin of remaining 2011-crop supplies. For corn, hedgers and cash-only marketers should make the final 10% cash sale to get to 100% sold on old-crop. For soybeans, hedgers should make a 10% cash sale and cash-only marketers a 15% sale to get to 100% sold.
Note: If you need remaining old-crop bushels to fulfill new-crop cash sales commitments, don't make these sales.
Corn futures are enjoying gains of roughly 4 to 14 cents with new-crop futures leading to the upside move.
- A selloff the past two days has given way to some fresh buying today on improved outside markets and ongoing weather concerns.
- Excessive heat this week in the Corn Belt with limited rains have caused further yield deterioration to an already disappointing corn crop. There are rains in the forecast, but at best they will stabilize the crop; precip now would not improve yields.
- Gulf basis softened for immediate delivery but firmed for August delivery at midday.
Soybean futures continue to enjoy strong gains in the 30- to 40-cent range.
- Traders are again building some weather premium into prices as rains are expected to miss central, western and southern regions of the Corn Belt and the crop is approaching its key development stage.
- A weaker dollar is also encouraging of some corrective buying after the market's selloff to start the week. Traders feel additional price rationing will be needed to make supplies last.
- News Indonesia will temporarily suspend its 5% soybean import duty Aug. 1 is adding light support.
Wheat futures continue to enjoy gains in the 20s at all three locations.
- Wheat futures continue to enjoy spillover support from soybeans and especially corn as strong gains in corn prices should increase wheat feed demand.
- The market is again paying attention to the tightening global stocks situation. Most recently, rumors have circulated Russia may ban grain exports.
- Traders are ignoring better-than-expected results in North Dakota from the second day of the spring wheat crop tour.
Live cattle futures are mixed with the first three contract months lower and far-deferred contracts seeing like gains. Feeder futures remain under heavy pressure.
- Tight showlist estimates and improvement in the boxed beef market has most expecting firmer cash cattle prices compared to last week's $113 trade, but as nearby futures are at a steep premium to this price, risk is to the downside for nearby contracts.
- This morning, Choice boxed beef rose 3 cents while Select cuts were steady. Movement surged to 184 loads, easing worries heat would trim red meat demand.
- Feeder cattle futures are being pressured by firmer corn prices after a two-day setback.
Lean hog futures gapped higher on the open and are enjoying strong gains.
- Lean hog futures are rallying thanks to a weaker dollar and more signs a low may be in for the pork product market, as both prices and movement impressed yesterday.
- August futures are at a discount to the cash market, which is supportive.
- Though packers continue to cut in the red, cash hog bids are mostly steady today as hog movement is light due to heat.
- News Russia will cut its import duty for pork from 15% to 0% on Aug. 23 as part of its accession to the World Trade Organization continues to provide light support.