Corn futures are 8 to 10 cents lower after rising initially at the open.
- Traders have shrugged off weather concerns and are pressing futures lower on concerns over a sharp drop in basis and continuing poor exports.
- Corn futures initially moved higher on this weekend's disappointing rains over driest areas of the Corn Belt and forecasts for dry conditions to continue and for heat to build in the western and upper Midwest this week.
- Traders look for the this afternoon's crop condition report to show the percentage of the nation's crop rated "good" to "excellent" to slip by 3 percentage points to 56%. This is largely factored into prices, however, and the market continues to believe a record corn crop is still in the cards for this fall.
- Meanwhile strength in the U.S. dollar has traders concerned about rebuilding exports.
- Countering trader concerns about exports is this morning's export inspections report which shows 17.436 million bu. inspected, up 5.377 million bu. from last week and above traders' expectations.
- Harvest is creeping north with reports of strong yields, some traders point out. That has weakened basis in central locations.
- The slump in December futures this morning has filled the gap left Aug. 26, which has boosted bearish views by technical traders.
- The market is ignoring news China's ag minister said the country will "gradually increase" corn imports due to rising domestic demand.
Soybean futures are 13 to 31 cents higher.
- Weather is driving soybean futures higher, as the rebuild in total supplies is seen as tighter than for corn.
- The weekend weather proved drier than expected and the dry forecast for the week ahead has traders solidly on the buy side of the market. In addition, temperatures are again expected to rise outside of the eastern Corn Belt this week.
- Traders look for this afternoon's crop condition report to show 54% of the nation's crop will be rated as "good" to "excellent," down 4 points from the previous week.
- Today's export inspections report came in at 1.422 million bu., down 1 million bu., from the previous week but within expectations.
- Futures have backed off from early gains and the test of last week's high on the November contract, but this morning's upside gap remains open.
Wheat futures are 5 to 8 cents lower for all three flavors of wheat.
- The selloff in corn futures and strength in the U.S. dollar index has traders moving to the sell side of the market.
- The strength in the dollar adds to concerns that U.S. wheat is not competitively priced globally. Supporting such ideas is news Egypt purchased 355,000 MT of Russian, Ukrainian and Romanian wheat over the weekend.
- Those concerns are trumping today's positive export inspections report, which came in at 36.41 million bu., more than 5 million bu. better than last week and above expectations.
- The HRS market is lower on harvest-related hedge pressure but some traders look for that to ease once progress crosses the halfway point. The market will get an update on harvest progress this afternoon.
Live cattle futures are slightly higher and feeder cattle futures are moderately higher.
- The market is getting support from mostly steady cash cattle trade on Friday at $123 in Texas and Kansas last week. This puts the October contract at a $4 premium to the cash market.
- Traders continue to look for a seasonal rise in demand as temps cool into fall and the school year moves into full swing.
- The boxed beef market is slightly higher this morning with Choice up 38 cents and Select up 2 cents, but movement is a light 88 loads.
- Feeder cattle are higher on the selloff in corn futures.
Lean hog futures are mixed this morning with the October contract slightly higher and December futures slightly weaker.
- Traders are looking ahead to forecasts of a return of last week's blast furnace. That heat could reduce average market weights and bring some lift to the market. Cash hog bids are steady with a few firmer bids.
- Packers continue to cut in the black and are rebuilding slaughter schedules following Labor Day.
- Nearby futures continue to trade at nearly a $6 discount to the cash hog market, which tends to limit selling interest.
- Supporting nearby futures is the rise in the pork cutout value today. It rose $1.36 and movement was a strong 180.3 loads.