September corn futures are around 5 cent higher, while deferred contracts are mostly 1 to 2 cents higher.
- Corrective buying and spillover support from soybeans have re-exerted themselves to boost futures after futures sold off slightly following the mildly higher opening.
- Traders are also starting to even positions ahead of Monday's Crop Production Report.
- The overall mood is heavily bearishness but traders are noting increasing dry conditions in the western Corn Belt where soils have remained dry for an extended period of time. But those concerns have lead only to corrective buying for the time being.
- Traders view weather forecasts as favorable for crop development but have noted they have turned somewhat drier than projected earlier for the western Corn Belt.
- The lighter-than-expected weekly corn export sales, which came in at 290,100 MT for 2012-13 and 220,900 MT for 2013-14, are limiting gains.
- Gulf basis levels have risen in late-morning trading with immediate delivery 5 cents stronger, last-half August 15 cents higher, September delivery 2 cents higher and October through December unchanged.
August and September soybean futures are 30-plus cents higher, while new-crop contracts are 17 to 22 cents higher.
- Positive export news and short-covering continue to lift futures.
- Traders are taking a positive look at today's weekly soybean export sales report, which came in just above the top end of the pre-report guess range at 1.097 MMT -- 79,400 MT for 2012-13 and 1.018 MMT for 2013-14. The leading buyers were "unknown destinations," which has the trade thinking China, at 525,000 MT and China at 381,000 MT.
- Futures are also higher on reports Chinese soybean imports were record-large last month at 7.2 MMT. That was up 3.9% from June and 22.7% above year-ago. In addition, Chinese trade data for July is supportive as it shows total exports improved 5.1% and imports rose 10.9%.
- In addition, futures are higher on news China's attempt to auction old soybean reserves was met with only limited interest.
- Futures are also gaining some support from the change in forecasts which have lowered precipitation chances for the western Corn Belt, although there is plenty of precipitation in the central Plains and into Missouri.
- Gulf soybean basis is unchanged in late-morning trading after being higher earlier..
SRW, HRW and HRS wheat futures remain mostly 1 to 3 cents weaker.
- Wheat futures are ignoring the corrective buying in corn and soybeans, and are lower on concerns over export demand despite a positive report this morning.
- Traders have shrugged off today's weekly wheat export sales, which were at the top end of pre-report expectations at 726,200 MT for 2013-14.
- Instead traders are concerned U.S. wheat is overpriced on the global market and fear sales will suffer as importers turn to cheaper supplies.
- Adding to that view is news this morning India will allow an additional 2 MMT of wheat move to the export market. A cabinet minister confirms the move is part of efforts to cut down huge stocks at government-run warehouses.
- Traders are also ignoring weakness in the U.S. dollar index.
- Gulf basis is unchanged in late-morning activity after being 4 to 6 cents lower for August through December delivery in the early going.
Live cattle and feeder cattle futures are moderately to sharply higher, but off their earlier highs.
- Traders are still sorting through news Tyson plans to suspend purchases of cattle fed beta-agonists, such as Zilmax. Traders believe this will reduce the beef supply, especially if other packers follow suit.
- Traders continue to look for cash prices to rise compared to the $120 prices seen in the Plains last Friday. The strong showing in futures could prompt packers to lift their bids.
- The wholesale beef market is proving disappointing this morning as Choice beef is down 34 cents but Select beef is 25 cents higher. Movement is moderate at 119 loads.
- News weekly beef export sales of 8,900 MT were down from 11,400 MT last week is a damper on buying enthusiasm.
- Feeder cattle futures are higher on the gains in live cattle futures.
Lean hog futures remain slighlty higher ahead of afternoon trade.
- Futures are higher on spillover from cattle futures and short-covering from yesterday's weak close.
- Cash hog bids are steady at most Midwest locations.
- The pork cutout value continues to strengthen. It is up 45 cents this morning and movement is a very solid 227.7 loads. The recent rise in pork cutout values has moved packer cutting margins well into the black, which is supporting the cash market.
- Weekly pork export sales of 4,800 MT were down from 9,600 MT last week.