Grain markets are lower in the overnight session after the USDA crop condition report yesterday. The improved weather outlook, or the lack of above normal rainfall ahead, is something we haven’t seen in what feels like quite a while. The U.S. corn crop rating improved by 1% to 69% good to excellent when the trade expected a 1% downgrade. The USDA will release the Supply and Demand report this Friday at 11am and it will be interesting to see if they make any changes to the corn yield. The US Dollar Index is up .59 to 96.88. July corn futures fell 4 cents to $4.145/bushel at dawn Tuesday, while December lost 4.5 cents to $4.305.
The soy complex is lower early Tuesday morning after also falling yesterday. Profit taking, a more favorable weather outlook, and better than expected crop conditions have given little to sustain the bulls. The trade was expecting soybean crop ratings to be 1-2% lower than last week but instead the ratings remained steady at 63% good to excellent. Planting progress advanced 2% to 96% compared to the 100% five-year average. Missouri beans progressed to 73% from 62% last week and compared to the 97% five-year average while Kansas progressed to 94% from 86% last week and compared to the 99% five-year average. July soybeans fell 6 cents early morning Tuesday to $10.2775/bushel, while July soyoil lost .17 cents to 32.47 cents/pound, and July meal gained $.1 to $354.5/ton.
Wheat futures are down after yesterday’s report of better than expected progress on the winter wheat harvest. Winter wheat harvest was 55% complete as of Sunday, compared to 38% last week and 58% for the ten-year average. Kansas winter wheat progress was up 31% to 79% complete, and Illinois was also up 31% to 69%. Missouri was up 22% to 68% harvested. Spring wheat conditions slipped 1% to 40% good to excellent, compared to 31% last year. July CBOT wheat futures 5 cents to $5.835/bushel early morning Tuesday, while July KC wheat was unchanged at $5.7625/bushel, and July MWE also unchanged at $6.1875.
Live cattle futures turned lower Monday, continuing the seasonal demand shift lower. Dressed beef values followed last Thursday’s losses lower with choice down 2.47 cents/pound and select down 4.13. This could suggest a lower call for the Tuesday open. August cattle futures lost .77 cents to 155.45 cents/pound Monday, while December futures fell .35 cents to 154.37. Meanwhile, August feeder cattle futures sank .62 cents to 216.82 cents/pound, and November feeders lost .45 cents to 212.82.
Lean hogs futures softened Monday, apparently correcting after last week’s rally in response to the Hogs & Pigs report. While the nearby futures months of Oct, Nov, and Dec all weakened, the deferred months strengthened, again reiterating the implied tightening of the farrowing supply reported by the USDA. Traders are likely still concerned that grain price hikes could reduce finishing weights and further reduce farrowing intentions. August hog futures slid .30 cents to 76.07 cents/pound Monday, while December lost .62 cents to 63.15.
ICE cotton futures were mixed Monday after a drastic decrease in U.S. acreage numbers last week. Last Thursday, cotton prices reached an 11-month high after the bullish export sales data was released, but then retreated later in the day presumably on profit taking ahead of the long holiday weekend. The supply and demand figures out this Friday could provide additional market insights. July cotton futures are unchanged at 66.43 cents/pound at dawn Tuesday, while December fell .41 to 66.54.