Corn futures have been choppy this morning and are currently slightly lower.
This morning’s weekly export sales report shifted the market’s attention back to the supply side of the balance sheet and the obvious demand destruction that has occurred. A net sales reduction of 33,700 metric tons (MT) for 2011-12 and sales of 168,400 MT for 2012-13 fell well short of expectations.
But expectations that Tropical Storm Isaac will bring wind and rain to the eastern Corn Belt is limiting pressure as this could increase field loss due to the weak corn stalks.
Harvest is underway in southern locations, adding light pressure.
Soybean futures are choppy, with nearbys slightly lower.
USDA Weekly Export Sales Report this morning shows that high prices have yet to significantly curbed demand. A net sales reduction of 10,100 MT for 2011-12 was more than offset by sales of 731,400 MT for 2012-13. The combined total was near the top of pre-report expectations and represents solid demand.
Soyoil sales more than tripled the top end expectations and soymeal sales met expectations, signaling demand for the soy products also remains strong.
Countering this, however, is news Chinese crushers bought 401,419 MT of soybeans in the government’s weekly auction, signaling heightened demand due to high U.S. prices.
Also limiting gains are ideas some filling beans will still be able to benefit from rains associated with Tropical Storm Isaac.
Wheat futures are mixed in Chicago, while Kansas City and Minneapolis wheat are posting slight losses.
Wheat futures are seeing some light profit-taking today after strong gains yesterday.
But selling interest is limited as expectations are building that Russia will restrict its grain exports as the crop has now fallen below levels seen after the disappointing 2010 season. A punitive tax as soon as October is a likely option, according to a Reuters survey.
However, this contrasts with the Russian deputy ag minister’s insistence that there’s no need to curb grain exports at this time.
Meanwhile, SovEcon trimmed its Russian wheat crop forecast by 1 million metric tons (MMT) to 38 MMT.
Weekly export sales of 508,400 MT for 2012-13 and 900 MT for 2013-14 met expectations.
Live cattle futures are choppy with a downside bias. Feeder cattle futures are slightly firmer in all but the August contract, which expires tomorrow.
Active cash cattle trade has yet to get underway on the Plains. If the market sees followthrough buying today after strong gains yesterday, this could improve the odds feedlots will receive prices steady with last week’s $120 to $121.
But if live cattle futures see stepped up price pressure today, cash prices are likely headed lower as the boxed beef market continued its decline yesterday, though movement improved. Plus, packers are buying for a holiday-shortened week.
Weekly beef export sales of 15,600 metric tons (MT) represent an improvement over last week.
Feeder cattle futures are enjoying light short-covering amid choppy corn prices today.
Lean hog futures are posting slight to moderate gains in most contracts this morning.
Lean hog futures are benefiting from short-covering as nearby futures remain at least $9 below the cash hog index.
But gains are limited to technical buying as market fundamentals favor the bears.
The cash hog market continues to soften despite improving packer profit margins due to plentiful supplies.
This has also weighed on the pork market. The pork cutout value declined another 67 cents yesterday, though movement was strong at 107.63 loads.
