Corn futures softened to a narrowly mixed tone ahead of midday.
- Traders are exhibiting uncertainty as to whether enough price rationing has occurred as they even positions heading into the weekend.
- Some are booking profits amid a firmer U.S. dollar and signs of demand destruction on the global market. Yesterday's disappointing export sales tally remains close at hand.
- But on the other hand, the U.S. crop is expected to be very disappointing and recent rains at this point at best will modestly improve test weights. Firmer Gulf basis levels this morning and at midday are another reminder of tight supplies.
- Traders will be given more insight as to the state of the crop as we embark on the Pro Farmer Midwest Crop Tour next week.
Soybean futures continue to enjoy gains of roughly 7 to 12 cents.
- Traders are focusing on the demand side of equation in the bean market today.
- Impressive daily and weekly soybean export sales signal high prices have yet to significantly slow use.
- But buying interest is being kept in check by recent rains and cooler temps which improve production prospects for those areas lucky enough to receive them. The five-day forecast is generally dry for the Midwest, however.
- Outside markets are also a mixed bag with the stock market cautiously higher and the dollar also seeing gains.
Wheat futures have eased from earlier gains to trade mostly 6 to 9 cents higher in Chicago and Kansas City, while Minneapolis wheat is mostly around 10 cents higher.
- Fresh news on the global wheat supply front has given the wheat market a boost.
- Talk continues to circulate that exports from Russia and Ukraine will be restricted, be it via government intervention (which officials continue to deny) or by tight supplies.
- The developing El Nino weather pattern adds to dryness concerns in western Australia.
- Argentina's wheat acres have also been cut by dryness and government policy.
- Tightening global supplies improve U.S. wheat export prospects. Today, South Korea bought 49,000 metric tons (MT) of U.S. wheat and Taiwan purchased 94,250 MT of U.S. wheat.
Live cattle futures have improved to post slight gains in in most contracts. Feeder cattle futures have also firmed to mixed trade.
- Cash cattle trade is getting underway in Texas and Kansas mostly at $121, which is $1 to $2 above trade last week.
- But reaction has been subdued as the August contract is in line with these prices as firmer trade was expected.
- While boxed beef prices again impressed this morning with Choice values rising $1.53 and Select cuts firming 38 cents, the high prices slowed movement to a mere 56 loads. This gives weight to ideas the beef market may be working on a top.
- Traders are also evening positions for the Cattle on Feed Report this afternoon. It is expected to show On Feed at 100.7%, Placements at 91.4% and Marketings at 101.6% of year-ago levels.
- Feeder cattle futures have improved to choppy trade as similar action in the corn market has traders optimistic a reversal lies in the near future.
Lean hog futures continue to enjoy slight gains.
- Lean hog traders are focused on corrective short-covering as futures are at a steep discount to the cash hog index.
- But steady to lower cash hog bids today and ongoing declines in the pork cutout value indicates building supplies are weighing the product market.
- Pork movement has remained strong, however. It must remain so to keep a floor under the hog market.