Corn futures have improved to mixed trade with the September and December contracts favoring the downside while deferred months are choppy.
- Traders remain concerned about crop prospects as forecast rains are likely too late to do much good and high temps are expected to maintain stress on the crop. The dollar's move off its highs helped encourage some light short-covering.
- Due to recent dryness and heat, traders expect USDA to cut the percentage of corn rated "good" to "excellent" by 4 points to 27% later today.
- Corn futures improved to mixed trade after export inspections for the week ended July 19 topped expectations at 19.598 million bushels.
- Recognition of the market's overbought condition continues to limit buying interest.
Soybean futures are 30- to 50-plus cents lower in most contracts.
- The possibility that forecast rains for Midwest regions north of I-80 will improve soybean yield prospects as they flower and set pods continues to encourage profit-taking.
- But if these rains disappoint, bulls could quickly regain the upper hand as crop concerns are high and demand remains strong.
- Traders expect USDA to lower its crop condition ratings by 3 percentage points to 31% "good" to "excellent" this afternoon.
- Traders are ignoring the fact that weekly export inspections of 15.756 million bu. met expectations and gained on last year's pace, signaling significant rationing has yet to occur.
Wheat futures are posting slight to moderate losses that top out in the upper teens.
- Heavy spillover pressure from corn and soybeans, along with a firmer dollar is weighing on wheat futures.
- Also, traders expect USDA to rate the spring wheat crop in generally favorable condition this afternoon.
- But pressure on wheat remains limited by ongoing crop concerns in the Black Sea region. The International Grains Council says Russia's 2012-13 exports may decline by 44%. And Kazakhstan's ministry lowered its grain crop estimate to 12.8 million metric tons (MMT) from 14 MMT.
- Weekly wheat export inspections of 11.644 million Bu were near the bottom of the pre-report guess range.
Live cattle futures are posting slight gains, while feeder cattle futures have softened to post slight losses.
- Live cattle futures continue to enjoy short-covering thanks to the tightening supply situation the Cattle Inventory Report on Friday signaled.
- Also, while boxed beef prices slipped 48 cents (Choice) and 25 cents (Select) this morning, movement surged to 215 loads.
- But buying is being limited by the steep premium futures hold to last week's cash prices along with strength in the U.S. dollar index.
- Feeder cattle futures reversed early gains as the corn market improved to mixed trade.
Lean hog futures remain slightly to moderately lower at midday.
- The cash hog market is mostly steady to firmer today as heat has limited weight gain and hog movement, but traders are more focused on the fact this will pull packer profit margins deeper into the red, which could encourage packers to reduce kill hours.
- Dollar strength and risk aversion are also encouraging profit-taking.
- Traders must see notable improvement in the pork product market to add long positions, as prices and movement faltered into week-end after strength early in the week.
- Confirmation of record-large pork supplies in cold storage Friday is adding pressure.