CORN

Corn futures were down 2 cents overnight, slipping after failing to hold early session gains yesterday in response to weaker-than-expected crop ratings.  Deteriorating crop conditions, especially for the Dakotas, Nebraska and Kansas led the declines.  Pressure from other markets, a 3 bil bu carryout figure looming over the supply picture and non-threatening weather favors the huge Managed Money position (297,000)  in corn leaving little incentive for them to cover their shorts.  Weekly Ethanol Stats are out later this morning, Exports tomorrow.

SOYBEANS

Soybean futures were down a penny overnight and remain in consolidation mode at the 100-Day moving average.  Weather forecasts will still be the key going forward.  An active weather pattern is seen for the Corn Belt the next couple of weeks; the 6-10 day forecast has rounds of showers and thunderstorms from Monday through Wednesday that will bring moderate rainfall to near 100 percent of the Midwest.  The improved Chines demand is supportive, but missing a sale on Tuesday and a lower-than-expected crush was disappointing to the market.  However, there was a rumor in the news after the markets closed on Tuesday that China has been shopping the past 24 hours for U.S. soybean supplies and that an announcement may be released this morning.

WHEAT

Wheat futures are called lower after seeing Sept Chicago contracts tumble below $5.00 per bushel for the first time since September.  Winter wheat contracts were 3 to 4 lower overnight, pressured by a winter wheat harvest pace that is improving and an overall bearish global supply.  Weak technical closes on Tuesday opens the door for additional long liquidation.  Mpls wheat is firm, underpinned by somewhat threatening weather for the Dakotas with below normal precipitation in the forecast for the 6 to 10 day and 8 to 14 day models.  In tender activity, Ethiopia seeks 400,000 tons of optional-origin wheat; Thailand seeks 240,000 tons of optional-origin feed wheat.

CATTLE

Live cattle futures are called mixed.  Cash trade is starting to develop and the trend looks softer than last week.  Retail values may be finding some stability, which could help bleed some volatility out of the cattle market.  Two consecutive positive closes for August cattle including a hook reversal bode well for buyers interested in going long the market.

HOGS

Lean hog futures are called steady to lower.  Overall cash weakness and large slaughter supplies limit rallies and weak technical closes on Tuesday may ushers in the potential for additional long liquidation.  Carcass retail values remain weak which will keep pressure on front month contracts.  Meanwhile, China’s meat importers fear clearing delays and a hit to demand after one of the country’s major ports started requiring COVID-19 tests for all meat and seafood containers to prevent contamination from the coronavirus that causes the disease; Tianjin port on the northern coast began testing batches from every single arriving container on Monday.

Author

Matthew Strelow