Corn futures have firmed to post slight gains in most contracts.
While disappointing weekly export sales data led to some profit-taking this morning, the market has since benefited from some short-covering amid ongoing crop concerns and spillover support from soybeans.
The eastern Corn Belt is expected to see rain and wind due to Tropical Storm Isaac. This could further deplete the crop’s yield potential as the crop is suffering from weak stalks.
But the start of harvest will limit the market’s upside, as this will only increase in the weeks ahead.
Soybean futures have rallied to post double-digit gains in most contracts.
Soybean futures set a new all-time high of $17.80 3/4 on the weekly continuation chart today thanks to USDA’s Weekly Export Sales Report this morning that showed historically high prices have not achieved the demand rationing needed to make tight supplies last.
Countering this, however, is news Chinese crushers bought 401,419 metric tons (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 have improved to mostly firmer trade in Chicago, while Kansas City and Minneapolis wheat are mixed.
Uncertainty regarding Russian export policy is keeping action choppy in the wheat market today as traders awaits the conclusion of a meeting on the matter Friday.
A Reuters survey shows expectations are building that Russia will restrict its grain exports as the crop has now fallen below levels seen after the disappointing 2010 season, with a punitive tax as soon as October being a likely option.
On the other hand, Russia’s deputy ag minister continues to insist there is no need to curb grain exports at this time.
SovEcon trimmed its Russian wheat crop forecast by to 38 million metric tons (MMT) today.
Weekly export sales of 508,400 MT for 2012-13 and 900 MT for 2013-14 met expectations.
Live cattle futures are mixed with nearbys favoring the upside and deferred months the downside. Feeder cattle futures are also narrowly mixed.
Traders are marking time as they wait for cash cattle trade to get underway on the Plains. Last week, trade took place at mostly $120 to $121.
The boxed beef market softened again this morning, which Choice values slipping 6 cents and Select cuts declining 98 cents. The softer prices did encourage strong movement of 108 loads, however.
Showlist estimates are tighter than last week, but the packers are also preparing for a shortened kill schedule due to the holiday.
Strong weekly beef export sales of 15,600 MT are providing light support.
Feeder cattle futures are choppy, mirroring action in the corn market.
Nearby lean hog futures are enjoying slight to moderate gains while far deferred months are steady to weaker.
Lean hog futures are benefiting from short-covering as nearby futures remain at a steep discount to the cash hog index.
However, short-covering is the extent of buying interest as the cash market is steady to sharply lower today as supplies are expanding in line with the seasonal trend and due to increased herd liquidation amid high feed costs. This week’s slaughter is expected to be up 6.3% from last year at this time.
Evidence that demand is lagging supply can also be seen in the pork market, which has declined steadily, though movement has recently picked up.
