July corn futures are fractionally lower, while the rest of the market is roughly 8 to 11 cents lower.
- The corn market is facing followthrough selling today after a failed test of the March high for December corn futures Monday and the subsequent bearish reversal.
- This encouraged funds to reduce their long exposure to the corn market to start the month of June.
- But the front-month has held up well in the face of pressure thanks to reports of strengthening basis levels around the country due to increased ethanol demand.
- Traders continue to ignore the rains that are moving across the western Corn Belt today that are expected to further delay corn planting, which was estimated at 91% complete as of Sunday.
- The market is also exhibiting little concern about the crop's lower condition rating to start this growing season. The Pro Farmer weighted Crop Condition Index showed the crop rated at 371 points (0 to 500 point scale), down roughly 10 points from year-ago.
Soybean futures are down 4 to 8 cents in old-crop futures with new-crop posting losses in the teens.
- Traders are taking advantage of yesterday's strong gains and strength in the U.S. dollar index by booking some profits.
- While USDA yesterday confirmed a slow pace of soybean planting -- 57% of the crop was seeded as of Sunday -- the planting date is not as vital for soybeans as it is for corn. Plus, soybeans are expected to pick up acres due to corn planting delays.
- Thus the market is not overly concerned about rains that will work their way through the Midwest today through Thursday.
Wheat futures are narrowly mixed in Chicago and Minneapolis with nearbys favoring the upside. Kansas City wheat is fractionally to 2 cents higher.
- Spillover from corn and soybeans along with strength in the U.S. dollar index are limiting buying interest in the wheat market.
- But the deteriorating condition of the winter wheat crop and slow spring wheat planting pace are also limiting selling interest.
- Spring wheat planting delays in North Dakota, especially, remain a source of underlying support for Minneapolis wheat. Just 64% of the North Dakota wheat crop is seeded, compared to 89% on average.
- Meanwhile, both the HRW and SRW wheat crop condition ratings declined last week, according to the weighted Pro Farmer Crop Condition Index, and heat on the Plains this week continues to stress the crop.
- Meanwhile, the first spring wheat condition ratings of the season came in 25.21 points below year-ago at 363 points according to our Crop Condition Index (scale of 0 to 500).
- Buying interest is also being limited by the ongoing USDA investigation of the GMO wheat finding and uncertainties with the situation.
Live cattle futures remain choppy at midday, with nearby contracts favoring the upside. Feeder cattle futures have improved to moderately higher trade.
- Boxed beef prices continued their slide this morning, with Choice cuts down 64 cents and Select $1.34 lower. Movement was solid at 115 loads.
- This has led to initial expectations for cash cattle trade to take place at steady to lower prices compared with last week's $124 action on the Southern Plains.
- But showlist estimates are little-changed over week ago and packers are still enjoying wide profit margins, which adds some uncertainty.
- Selling interest for nearby contracts is also being limited by $3-plus discount the June contract holds to the cash hog index. An unwillingness to narrow this gap signals lingering demand concerns.
- Weaker corn prices are encouraging corrective short-covering in feeder cattle futures, though the steep discount futures hold to the cash index limits buying interest otherwise.
Lean hog futures are enjoying slight to moderate gains at midday.
- Cash market strength is lifting lean hog futures at midday. Packers are paying steady to as much as $4 higher prices for cash hog bids today, signaling they are not as well supplied for near-term needs as earlier thought. Plus, supplies are tightening.
- Traders are not overly concerned about a 57-cent slide in the pork cutout value this morning, as movement picked up to 183.6 loads. Traders expect pork to benefit from the consumer resistance to high beef prices.
- But a less-than-ideal start to summer grilling in terms of weather tempers such ideas.
- The premium the front-month contract holds to the cash hog index is also a limiting factor.