Corn futures have trimmed losses to trade around 3 to 7 cents lower ahead of midday.
- Rain over the weekend and more in the forecast makes it difficult for corn to find buyers, despite the fact these were too late to help yields.
- Traders expect USDA to again lower its corn condition rating this afternoon.
- Also, Gulf basis levels at interior locations have softened as end-user demand has slowed due to high prices and anticipation new-crop supplies will come to market early as drought and an early start to the growing season should up the harvest date.
- But pressure is being limited by a weekly corn export inspections tally of 19.887 million bu., which was near the top of expectations.
Soybeans have pared early losses to post losses ranging from the single-digits to 30-plus cents. Nearby contracts remain the downside leader.
- Soybeans are still able to benefit from rain, so rains over the weekend have kept bears in control of the bean pit.
- Also, news China National Grain and Oils Information Center expects the country's bean imports to fall to 4.5 million metric tons (MMT) in August and to less than 4 MMT in September and October reminds the market demand destruction has occurred.
- Countering this, however, are soybean export inspections for the week ended Aug. 2 that met expectations and gained on last year's pace.
- Also encouraging some light short-covering is USDA's announcement that China bought 106,000 metric tons (MT) of soybeans for 2012-13, signaling the nation does not rule out higher prices ahead.
- Celeres says it anticipates a record-large Brazilian soybean crop of 78.1 M MT.
Nearby wheat futures have improved to post slight gains in nearby contracts at all locations.
- Wheat futures improved as the corn and soybean markets trimmed losses.
- But these markets will need strength from corn to encourage buys outside of short-covering, especially as the market expects USDA data to reflect a generally favorable U.S. spring wheat crop.
- Hedge-pressure related to ongoing spring wheat harvest is limiting buying interest in Minneapolis wheat.
- Ongoing concerns about global wheat stocks is also encouraging short-covering. Most recently, SovEcon lowered its Russian wheat production estimate to 40.5 MMT to 43 MMT from 46 MMT previously.
Live cattle have improved to post moderate gains in all but far deferred contracts, which are slightly lower. Feeder cattle continue to enjoy $1-plus gains.
- Cattle futures are enjoying followthrough buying after firmer cash cattle prices last week.
- Also, the boxed beef market got off to a strong start this morning -- Choice values rose 41 cents and Select cuts firmed 86 cents; movement was strong at 132 loads.
- Cattle futures are also benefiting from expectations for grilling demand to increase as temps cool in the months ahead while supplies tighten seasonally.
- Feeder cattle futures are benefiting from softer corn prices.
Lean hog futures have softened to post slight to moderate losses in all but the August contract, which has held onto gains.
- Near-term supplies are plentiful as recent heat and dryness has encouraged producers to move more hogs to market and three Midwest plants are closed today. Thus cash hog bids are steady to $1 lower today.
- The pork market must continue to improve for packers to work through supply surplus and raise bids. Packer profit margins are back in the black, but because they have been negative for much of 2012, they remain hesitant to raise bids.
- August lean hogs are benefiting from the discount they hold to the cash hog index.