Corn futures are a penny higher in the front-month with new-crop futures 2 to 4 cents lower.
- Traders continue to process the impact of current blistering hot temperatures and forecasts for more of the same on the late-maturing corn drop. While December futures have retreated from Monday's high and psychological resistance at $5.00, the top of Monday's gap area at $4.79 continues to provide support.
- Strength in the U.S. dollar index is boosting concerns about export demand even though prices are much lower than a year ago. Weaker near-term Gulf basis adds to that concern.
- Gulf corn basis for immediate delivery is now down 20 cents after being 10 cents lower in early morning trading, which suggests Monday's run-up is crimping demand while enticing farmer sales. Basis for September through November delivery is unchanged from earlier while it is a penny lower for December delivery.
- The trade is shrugging off talk South Korea will increase its new-crop corn purchases.
- Weekly ethanol production of 820,000 barrels per day (bpd) was down 24,000 bpd from the week prior. Ethanol stocks fell 232,000 barrels to 16.25 million barrels.
Soybean futures continue to see choppy action but bulls currently have a slight advantage, with September up 7 cents and deferred contracts fractionally to 5 cents higher.
- A stronger dollar is tempering gains in new-crop contracts, but news China bought 120,000 MT of soybeans for 2013-14 delivery is lifting September futures and providing some support across the board.
- The ongoing intense heat across the nation's midsection continues to provide support to the market, keeping prices well above the gap area left Monday.
- Private crop watchers, such as crop consultant Dr. Michael Cordonnier and Lanworth, have lowered their yield and production projections.
- Gulf basis for near-term delivery is unchanged in late-morning trading following a 5-cent slide in Gulf basis for August and early September delivery this morning. First-half September delivery is unchanged while last-half September is 2 cents stronger. October delivery is a penny lower, while November and December delivery is unchanged..
SRW wheat has softened to post losses around a penny; HRW wheat is 2 to 3 cents higher; and HRS wheat is up 2 to 6 cents.
- Futures are gaining some support from USDA's announcement unknown destinations bought 119,000 MT of U.S. wheat.
- But news Egypt bought 295,000 MT from Russia, Ukraine and Romania dampers that news as it reminds traders U.S. wheat prices are high by comparison.
- Spillover from weakness in new-crop corn futures and strength in the U.S. dollar index is tempering gains as well.
- Also, news Toepher International expects Germany's wheat crop to rise 8.3% from last year reminds of ample global supplies.
- The slow pace of the spring wheat harvest is lifting HRS wheat.
- Basis levels for HRW in the Plains is listed as steady this morning.
Live cattle futures are slightly higher while feeder cattle futures are moderately higher.
- Stronger boxed beef prices are lifting live cattle futures. Choice boxed beef rose 65 cents this morning on much improved movement of 124 loads.
- The cash standoff continues with bids at $121 in Kansas, down $2 from the bulk of last week's trade, while feedlots are asking $125 to $126. This signals late-week trade is likely.
- The seasonal downturn in supplies continues to limit selling interest in futures.
- Softer corn prices are lifting feeder cattle futures.
- The stronger U.S. dollar index is tempering gains.
Lean hog futures are slightly to moderately weaker at midday.
- Light profit-taking is dominating trade today, but trading activity is limited to a narrow range.
- The stronger U.S. dollar index is seen as a negative as well.
- Limiting gains are ideas the seasonal upswing in numbers will press prices lower, but a $10 discount between October futures and the cash index has already priced in a break.
- Meanwhile, the intense heat is already taking its toll in terms of trimming average hog weights. In Iowa and southern Minnesota for the week ended Aug. 24 fell 0.4 lbs. from the week prior.
- Early cash hog bids are mostly steady. Packers are still enjoying wide profit margins.
- The pork cutout value plummeted $5.25 this morning, but movement surged to 325.3 loads.