orn futures are around 3 to 5 cents lower through the September contract, while farther deferred months are choppy.
- Concerns about the Chinese economy and risk aversion ahead of USDA's Crop Production Report are giving bears a slight upper hand today.
- Traders expect USDA to lower its crop production estimate by 129 million bu. from September to 10.598 billion bushels.
- The market also expects USDA to trim its 2012-13 carryover estimate from 733 million bu. in September to 645 million bushels.
- Gulf basis levels softened for January and February delivery at midday, reminding the market that demand destruction has taken place.
November soybean futures have improved to choppy trade, while deferred months are mostly 2 to 9 cents lower.
- Nearby soybeans have improved amid ongoing concerns about the need to ration supplies.
- But expectations USDA will increase its production estimate by 136 million bu. on Thursday to 2.77 billion bu. is keeping most contracts in negative territory.
- Traders also expect USDA to raise its 2012-13 carryover estimate by l9 million bu. to 134 million bu., though this is still well below last year's tally of 169 million bushels.
- Gulf basis levels softened for all delivery months this morning but were steady at midday. This signals more supplies are coming available as harvest progresses.
Wheat futures continue to enjoy gains around 4 to 7 cents in most contracts, with Chicago wheat seeing the lightest gains.
- Fresh global production concerns are giving wheat futures a boost as this improves export prospects for the U.S.
- Russia's deputy minister expects total grain production of 70 MMT, which is below the 72 MMT to 74 MMT forecast by the country's ag ministry.
- France's ag ministry lowered its wheat crop forecast to 35.9 MMT, but that's still up 5.6% from last season.
- Also today, Offre & Demande Agricole UK says it expects the country's winter wheat production to fall 1 MMT from last month to 13.6 MMT. This will make the country a net importer of wheat in 2012-13 according to the firm.
- Dryness concerns persist in Ukraine, Australia and the U.S. Southern Plains.
Live cattle futures have softened slightly to post slight gains across the board. Feeder cattle futures have softened to choppy trade amid light trading volume.
- Cattle futures continue to benefit from firmer cash cattle trade yesterday and hopes of more of the same this week as supplies are thought to be tightening. Traders will watch for showlist estimates this afternoon to gauge this week's supplies.
- Last week's slaughter was down 7.3% from the year prior, due both to tightening supplies and poor processing margins.
- Futures are also benefiting from a 62-cent rise in Choice boxed beef cuts and a 77-cent increase in Select values this morning, though movement was lackluster at 83 loads.
- Gains are being limited by dollar strength and concerns about how red meat demand will fare in the face of a slowing global economy.
- Dollar strength is encouraging light profit-taking in feeder cattle futures, though weakness in corn is limiting pressure.
Lean hog futures are posting slight to moderate gains in all but far deferred months.
- Profitable margins for packers are keeping the cash hog market steady to higher this morning, though seasonally expanding supplies is causing them to exercise a bit more restraint in their bidding.
- Also limiting gains is a slight decline in the pork cutout value Friday, though values are still up sharply over week ago.
- October lean hogs, which expire Friday, are trading at a $1-plus premium to the cash hog index, which is limiting gains. In contrast, the soon-to-be front-month December contract is benefiting from the more than $3 discount it holds to the cash hog index.
- Gains are also being kept in check by signs China's economy is slowing. This raises concerns about global meat demand.