What Traders are Talking About:
Overnight highlights: As of 6:00 a.m. CT, corn futures are trading 1 to 3 cents lower, soybeans are 6 to 11 cents higher and wheat futures are 2 to 4 cents lower. Overnight trade definitely shows traders' bias -- bullish toward soybeans and bearish toward corn and wheat. Cattle and hog futures are expected to open the week with a mixed tone.
* USDA September reports out this week. USDA's second estimates of the corn and soybean crops will be released Thursday. Based on a Reuters poll of 29 market analysts, traders expect USDA to lower both its corn and soybean estimates. The average guess for corn is 13.62 billion bu. on a national average yield of 153.69 bu. per acre, while the soybean crop is guessed at 3.14 billion bu. with the national average yield pegged at 41.17 bu. per acre. In August, USDA estimated the corn crop at 13.763 billion bu. on a yield of 154.4 bu. per acre and the soybean crop at 3.255 billion bu. on a yield of 42.6 bu. per acre.
The long and short of it: With the average trade guesses below month-ago, pre-report positioning should spark short-covering in corn and limit selling interest in soybeans.
* Record temps to open the week; cooler temps coming. Temps will be record-high across the Corn Belt today with readings in the upper 90s widely expected and some areas likely to see triple digits. That extreme heat is expected to last through Tuesday before cooler, more seasonal, temps move into the region. After driving through northeastern and central Iowa this weekend, crops are being pushed by the late-season heat and dryness. Many soybean fields are turning and some have simply prematurely shut down. Corn is firing and tipping back.
The long and short of it: Coming out of Crop Tour we said the immature crops needed heat to help push development, but the heat in combination with continued dryness has simply been too much.
* More signs China's economy is stabilizing. China's trade surplus widened to $28.6 billion in August from $27.2 billion in July as exports rose 7.2% from year-ago while imports increased 7%. China imported 6.37 MMT of soybeans in August, which was down 11.5% from July but 44.1% greater than year-ago. Through the first eight months of the 2013 calendar year, China has imported 41.05 MMT of soybeans, a 4.4% increase from year-ago. Meanwhile, China's consumer price index (CPI) came in 2.6% above year-ago last month, with food prices rising 4.6% and non-food prices increasing 1.5%. China's producer price index (PPI) dropped 1.6% last month.
The long and short of it: China's economic data is strengthening, which is positive from a macro-economic standpoint. Meanwhile, China's appetite for soybeans remains voracious, which not a surprise to anyone.
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