Tight old crop conditions seemed to support corn futures Tuesday morning, with wire service sources citing cash market strength, particularly in the western Corn Belt, for early CBOT gains. However, prices set back as traders began exiting long July futures positions when the nearby contract closed the huge gap created when it broke down in response to the bearish March 28 USDA Grain Stocks report. July corn had risen 1.25 cents to $6.6975/bushel around midsession Tuesday, while December climbed 8.25 cent to $5.4675.
After rising modestly overnight in response to the Monday afternoon Crop Progress report, soybean futures continued their advance Tuesday morning. As in the corn pit, traders apparently reacted well to renewed cash market tightness as old-crop supplies dwindle. Thus, the nearby July future led the way higher. July soybean futures gained 6.5 cents to $15.19/bushel late Tuesday morning, while July soyoil gained 0.03 cents to 48.87 cents/pound, and July soybean meal climbed $5.6 to $454.7/ton.
Wheat futures rallied along with corn and soybeans Tuesday morning. Current supplies are not the same issue for the wheat complex, since the winter wheat harvest has begun in the Southern Plains. On the other hand, the slow pace of the winter wheat harvest indicated on the Crop Progress report reportedly sparked buying interest, since that reminded traders that the delayed winter wheat crop could fall victim to hot, dry conditions during the weeks just ahead. July CBOT wheat lifted 4.0 cents to $6.845/bushel just before lunchtime Tuesday, while July KCBT wheat advanced 3.75 cents to $7.175, and July MGE futures was unchanged at $8.0025.
Cattle futures seemed to suffer a negative reaction to their Monday rally in overnight trading, but turned upward again late Tuesday morning. Bulls are fighting seasonally bearish expectations, especially at the cash level. However, we suspect talk of wholesale firmness supported CME futures again this morning. August cattle ran up 0.17 cents to 119.42 cents/pound around midday Tuesday, while December added 0.10 cents to 125.40. August feeder cattle futures rose 0.15 cents to 144.67 cents/pound, and November added 0.27 to 150.82.
Seasonally reduced hog and pork production typically meet robust demand at this time of year, but expectations for easing conditions after Independence Day have weighed upon deferred CME futures lately. However, talk that current hog numbers are falling short of anticipated levels reportedly encouraged fresh buying Tuesday morning. Discounts now built into the summer contracts are probably sparking bullish interest as well. July hog futures gained 0.82 cents to 98.77 late Tuesday morning, while December edged up 0.25 cents to 82.22.