Grain complex moves lower at midsession

Corn futures are trading lower at midday. Futures prices are trading slightly lower as the trade awaits tomorrow’s supply and demand report. Trade is expected to remain quiet as most traders have secured profits and are waiting to see the extent of the decline in the 2012/13 corn crop. Traders and analysts alike are expecting to see further reductions to production but expect weak demand to offset the loss. Analysts’ are estimating 2012/13 corn production lower at 10.380 billion bushels and ending stocks at 592 million bushels.

Soybean futures are trading lower at midday. Futures continue to extend their losses at midday trading as much as 14 cents below unchanged. Fund selling and position squaring ahead of tomorrow’s supply and demand report are the primary causes of such sharp declines in the market. The trade is expecting to see declines in 2011/12 and 2012/13 ending stocks, suggestive of an even tighter supply situation. Prices in the soyoil and soymeal markets are lower as well. Soyoil is down 4535 points while soymeal is trading about $1 lower.

Wheat futures are trading lower at midday. Early morning gains have been erased as midday prices tumble on spillover pressure in the corn and soybean markets and position squaring ahead of the USDA’s September WASDE report. Tomorrow’s report will not show any new estimates for wheat but it is expected to show lower global ending stocks, reflective of poor production in key growing regions (ie Russia, Ukraine, Australia, etc).

Live cattle futures are trading mixed at midday. Expectations for steady to higher cash cattle prices are supporting the higher prices. Some traders believe cash prices will remain firm versus last week due to tightening supplies, while others believe unfavorable packer margins and lower bids will bring prices down this week. However, cash trade remains undeveloped and could prove disappointing for this week if packers remain reluctant in purchasing beef products.

Lean hog futures are trading lower at midday. Profit taking and the worsening market fundamentals are weighing on hog futures. USDA reports Monday’s hog slaughter at 436,000 head, the largest one day slaughter since December 2009. Packers continue to pass out lower bids in the face of an overwhelming supply of pork, which equates to lower cash prices. Cash market trade is called steady to $1.50 lower.

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