Corn futures are generally 4 cents higher in all but the September contract, which is down 2 cents.
- New-crop corn futures are slightly higher as traders begin to square positions ahead of Thursday's Crop Production and Supply & Demand Reports from USDA. Weather is only a small part of the conversation as traders feel much of the distress has already been factored into prices.
- The weather news continues to be negative for finish on this year's crop, however. The forecast continues to keep high temps in the forecast and, more importantly, only slight chances for light showers.
- Some of today's short-covering in corn futures is coming from yesterday's decline in USDA's crop condition rating which moved our weighted Crop Condition Index (0 to 500 point scale) down 4 points.
- Looking ahead to Thursday's reports, analyst surveys indicate the market expects USDA to lower its national average yield projection to 153.9 bu. per acre for a 13.646 billion bu. crop, down 117 million bu. from August.
- Pre-report expectations call for USDA to cut its 2013-14 carryover peg by 14 million bu. from last month to 1.697 billion bushels.
- Brazilian government crop supply agency Conab raised its corn forecast to 81.3 MMT, up from 80.3 MMT.
- Gulf corn basis is unchanged in late-morning trading. Meanwhile, interior delivery points are seeing basis weaken by 5 to 30 cents from last week as the early phases of this year's harvest move north.
Soybean futures are again under pressure after rallying this morning. November through July 2014 contracts are 3 to 6 cents weaker.
- Soybean futures are weaker on forecasts from some private forecasters of increased potential for light showers in parts of the Midwest late this week and possibly again next week.
- The market is ignoring USDA's announcement this morning of a 121,000-MT soybean sale to an unknown destination.
- Traders are also looking ahead to USDA's Crop Production and Supply & Demand reports on Thursday.
- Pre-report expectations are for USDA to estimate a national average yield of 41.3 bu. per acre for a 3.149-billion-bu. crop, down 106 million bu. from last month.
- Traders look for USDA to trim 2013-14 carryover to around 161 million bu., down from 220 million bu. last month as a result of the smaller crop estimate.
- Traders are ignoring the decline in crop conditions released yesterday by USDA which resulted in a 6-point drop on Pro Farmer's weighted Crop Condition Index (0 to 500 point scale) to 336. Iowa led the decline.
- The weather forecast from USDA remains negative for pod filling this week.
- Gulf basis is unchanged in late-morning trade after falling 31 cents for immediate delivery in early morning trade. Basis levels at interior locations are reportedly 10 cents weaker on new-crop harvest begins.
Wheat futures are higher this morning with HRW and SRW up 4 to 6 cents and HRS fractionally to 4 cents higher.
- The lift in corn futures has resulted in gains in wheat futures as well.
- The market is getting some lift from news the Brazilian government crop supply agency Conab had cut its forecast for the 2013-14 wheat crop by 11.9% after frosts in the main southern producing state. The agency suggests further cuts to its estimate could be ahead.
- The market is also benefiting from news that Brazil has increased duty-free wheat imports by 400,000 MT through the end of November, which pushes the quota to 2.7 MMT.
- The Australian Bureau of Agricultural and Resource Economics and Sciences has lowered its wheat production peg by 932,000 MT to 24.467 MMT. This is still up from 22.1 MMT last season. The bureau also trimmed its Australian wheat export forecast by 100,000 MT to 19.5 MMT.
- UkAgroConsult expects Ukraine to harvest a record grain crop of 56.06 MMT this year thanks to stronger-than-expected corn and wheat crops. Previously, the firm pegged the grain crop at 53.8 MMT.
- The market is also looking ahead to Thursday's reports. Traders look for USDA to raise carryover by around 5 million bu. from last month to 556 million bushels. Report data for corn could be the larger driver of post-report action for the wheat market.
- Gulf basis for SRW wheat is 3 cents firmer for first-half September delivery, 4 cents lower for last-half September delivery and unchanged for October through January delivery.
Live cattle futures continue to trade narrowly mixed with nearbys posting slight losses. Feeder cattle futures are slightly lower as well.
- Without much direction from the cash market, traders continue to trim the premium nearby contracts hold to last week's mostly $123 cash action. Packer margins are weaker and showlist estimates are higher which has traders looking for steady to weaker cash prices once trading gets rolling later this week.
- Wholesale beef prices rose today with Choice boxed beef up 51 cent and Select up $1.03, movement was decent at 93 loads.
- Traders are hesitant to lean too heavily on prices as seasonal trends favor higher cash cattle prices and strong beef demand into the fall.
- The slight lift in corn prices is pressuring feeder cattle futures.
Lean hog futures continue to post slight losses this morning.
- Light profit-taking after yesterday's run-up continues to dominate trade today.
- The intense heat is continuing to crimp hog weight gain and keeping the cash hog market steady to higher.
- Futures are getting some light support from today's wholesale trade. The pork cutout rose 44 cents this morning and movement is a solid 180.3 loads.
- The cash hog index has edged higher again with the October lean hog contract now at more than a $1 discount to the index, which is limiting selling pressure.