Corn futures remain under pressure with September through July futures down 6 to 8 cents and farther deferred months posting lighter losses.
- Corn traders are opting to book some profits ahead of the weekend and calendar flip as they expect harvest pressure to build in September.
- Traders are working to evaluate whether prices have risen high enough to make the small crop last. Yesterday’s export sales report certainly indicated price rationing has occurred, but the market is worried wind and rain will further reduce the crop’s yield potential.
- Gulf basis levels were steady this morning and at midday.
Nearby soybean futures remain roughly 7 to 8 cents lower while deferred contracts are narrowly mixed.
- Soybean traders are taking advantage of yesterday’s contract highs by booking profits ahead of the long weekend.
- Rains for areas of the Midwest and Mid-South could still benefit some late developing beans, though the overall impact of hurricane Isaac will likely be net-negative for beans.
- Gulf basis levels were lower this morning but steady at midday.
- But downside risk is limited to profit-taking as yesterday’s export sales report signaled historically high prices have yet to slow use.
Wheat futures continue to see double-digit losses in Chicago and Kansas City wheat, while Minneapolis wheat is seeing slightly lighter losses.
- Russian officials say there’s no need to restrict grain exports, but its ag ministry cuts its grain crop forecast to a range of 70 million metric tons (MMT) to 75 MMT after lowering it to 75 MMT last week.
- Just two months into its 2012-13 marketing year, Russia has already exported 4.6 MMT of its estimated 10 MMT to 14 MMT grain surplus.
- Drenching rains associated with Hurricane Isaac in the southern half of the U.S. have improve soil moisture reserves in the region, which could benefit the soon-to-be-planted winter wheat crop.
- Wheat quality concerns overseas are limiting pressure on Minneapolis wheat.
Live cattle futures have softened to choppy trade, while feeder cattle futures have strengthened to post sharp gains.
- Very light cash cattle trade has begun in the Southern Plains at mostly $122 to $123 and a few more sales have taken place at these prices in Nebraska. But most packers have passed on these firmer prices as they are buying for a shortened week.
- Increased boxed beef movement at lower prices of late signals retailers plan to feature beef after Labor day. This morning, Choice boxed beef cuts fell 97 cents, while Select cuts softened 44 cents. Movement was decent at 97 cents.
- Feeder cattle futures strengthened as the corn market weakened.
Lean hog futures have moved well off their early lows to trade slightly to moderately lower.
- Heavy profit-taking early has given way to some light bargain buying as futures remain at a steep discount to the cash hog market. A lower dollar is also encouraging to this end.
- But buying interest is limited to short-covering due to expanding supplies and aggressive sow liquidation.
- While a surplus of pork has pushed prices lower, it has led to strong movement.
- Cash hog bids are steady to lower today as packers are having no trouble securing needs for a holiday-shortened week.
- Market action to close out the week and the month signals traders expect weakness in the lean hog market to continue.
