Corn futures have moved to the negative side after a choppy start with the September contract down a penny and the deferred contracts down 2 to 3 cents.
- The market is having a difficult time finding bullish news with weather virtually eliminated as a potential bullish factor.
- Both the five-day and 6- to 10-day outlooks are non-threatening as they call for cool temps and precip for most of the Corn Belt.
- The remaining concern is the slow development of the crop as the cool temperatures could push back the harvest date for the late-planted crop. While that may limit selling interest, it certainly does not prompt any buying interest, yet.
- Another bearish factor handing over the market are reports hedge funds have more than doubled their net short positions as of July 23 over the week prior to a record-large size.
- Traders expect this afternoon's crop condition update from USDA will show 62% of the nation's corn crop is in "good" to "excellent" condition, down 1 point from last week.
- Today's export inspections report from USDA is viewed as neutral as it came in within trade expectations. USDA says exports totaled 11.087 million bu., 1 million bu. more than the previous week.
- Gulf basis continues to be steady in late-morning trade, with the exception of the December delivery period, which is 4 cents lower. The stable basis is providing some support to futures this morning.
Soybean futures are mixed with the front-month contract around 4 cents higher and new-crop contracts 12 to 16 cents lower.
- Bull spreading is back in vogue as traders look at favorable crop growing conditions versus tight old-crop supplies. But the old-crop story is old news and has only limited upside potential.
- Weather forecasts call for cool temps and scattered rain chances this week and the 6- to 10-day forecast calls for more of the same. These forecasts are seen as favorable for soybean crop development and are pressing prices lower.
- Ideas the cool temps will extend the harvest are not yet seen as a concern.
- This week's crop conditions report from USDA is expected to show 64% of the nation's soybean crop is rated "good" to "excellent," unchanged from the previous week.
- Traders are taking a neutral view to today's export inspections report from USDA which shows a total of 1.342 million bu. inspected, down 2.574 million bu. from the previous week but within trade expectations.
- Basis levels in some interior locations have stabilized or even firmed thanks to tight supplies, but ideas production will rebound continue to pressure basis in other locations.
- Gulf basis bids are not established for summer delivery, unchanged for last-half September delivery, 1 cent higher for October and 1 cent weaker for November delivery.
- News AgRural expects Brazil's 2013-14 bean crop to rise 9% from year-ago to 89.1 MMT is adding light pressure to new-crop beans.
SRW, HRW and HRS wheat futures have softened slightly to mixed trade.
- The market initially benefited from news Japan may lift its ban on U.S. western wheat this week. Trade sources say the country may require certification wheat is free of GMO material prior to shipment, but they believe this is a step in the right direction to resuming trade sooner rather than later.
- Short-covering is lifting futures on ideas the downside has been overdone but losses in corn and beans are limiting gains.
- The market is also benefiting from ideas the recent price decline is sparking end-user buying interest.
- Today's export inspections report from USDA is providing some support for that view as it showed inspections of 25.363 million bushels. Inspections rose nearly 1.2 million bu. from last week and the tally topped traders' expectations.
- Gulf SRW wheat basis was steady to 7 cents higher for July through October delivery this morning and steady at midday.
- Iraq and Jordan have tendered for 50,000 MT and 100,000 MT, respectively, of optional origin wheat.
Live cattle futures are slightly to moderately higher and feeder cattle futures are moderately higher.
- Traders are reacting positively to the firmer cash cattle trade at $121 in Nebraska and Iowa Friday and steady trade in the Southern Plains at $119. Traders are looking for signs the cash market has put in a near-term low.
- Packers need strength in the boxed beef market to raise cash cattle bids and they are not getting it this morning. Choice cuts fell 63 cents to $186.52 and Select eased 16 cents and movement is light at 84 loads.
- Traders continue to wait for this week's showlist estimates before forming cash opinions.
- Feeder cattle futures are stronger on the boost in live cattle futures, softer corn prices and an anticipated decline in feeder cattle numbers.
Lean hog futures continue to trade mixed with the August contract slightly higher but deferred contracts slightly weaker.
- The August contract is gaining some light support from the $2-plus discount it holds to the cash hog index and mostly steady cash hog trade today.
- Near-term supplies are viewed as tight, but weights have moved up slightly on the cooler temperatures and traders expect supplies and weights will both rise seasonally soon. That is viewed as a negative for deferred contracts.
- The pork cutout value eased 28 cents this morning and movement is a relatively light 128.8 loads.
- Traders also view the decline in the grain complex as a negative for the more deferred contracts as a decline in feed costs and rise in supplies tends to boost farrowings.