Pro Farmer's Market Snapshot

Corn futures have backed well off their overnight highs but remain higher. New-crop contracts are leading gains, with December corn around 12 cents higher.

• Worries about dryness in northern and western areas of the Corn Belt are price-supportive. Limited rains and hot temps will be seen through these areas this week. Southern and eastern areas of the Corn Belt, along with the Delta and Southeast will be wetter this week.
• Traders will be watching USDA’s weekly crop ratings later this afternoon to see if there are any reductions from the initial ratings of 76% “good” to “excellent” given the Memorial Day frost/freeze in northern areas and the dryness in northern and western locations. 
• Aside from weather, traders will begin preparing for USDA’s June Supply & Demand Report on Thursday, which is expected to show lower ending stocks forecasts for both the old- and new-crop marketing years.
• Weekly corn export inspections totaled 1.413 MMT, which was at the low end of pre-report estimates. Corn inspections slowed significantly from 2.104 MMT the previous week but were still nearly 200,000 MT above the same week last year.  

Soybean futures are higher, with new-crop November up about 22 cents but that’s near session lows. Soybean meal futures have turned mixed and soybean oil futures are up 40 to 135 points.

• Soybean futures gapped higher in overnight trading amid concern extreme heat and dryness in the U.S. Midwest may harm crops.
• November soybeans hit a contract high at $14.80 a bushel and left a gap on the daily chart. The contract has entered that gap but it remains open.  
• Limited rainfall is expected in both the Northern Plains and the western U.S. Corn Belt this week, though the areas including the lower and eastern Midwest may receive some rain, World Weather Inc. said.
• A high-pressure ridge over North America is expected to shift to the west, not the east, later this week, which should limit heat in the heart of the Midwest and may generate showers, World Weather said.
• Trade will watch the USDA’s next weekly crop progress report, scheduled for release after today’s close. The report will include USDA’s first national soybean crop ratings.
• Weekly soybean export inspections totaled 237,108 MT, which was within the pre-report range of estimates from 100,000 MT to 300,000 MT.

Winter wheat futures are narrowly mixed. Spring wheat futures are 9 to 14 cents lower.

• HRS wheat gapped higher and shot to new highs overnight on support from weather concerns with the spring wheat crop. But the gap has been filled and some profit-taking is weighing on futures in midmorning trade.
• The Canadian Prairies received some good rains over the weekend and more are expected this week. But little relief from moisture stress is expected in the U.S. Northern Plains, which should limit seller interest in HRS futures unless the forecast shifts wetter.
• In addition to profit-taking, long spring wheat/short winter wheat spread unwinding is being seen this morning.
• Traders will begin to prepare for Thursday’s Supply & Demand and Crop Production Reports. Just mild changes are expected to USDA’s old- and new-crop ending stocks. Traders expect the winter wheat crop estimate to rise nearly 30 million bu. from last month.
• Weekly wheat export inspections totaled 418,547 MT, which was closer to the top end of pre-report estimates and above the previous week’s 260,288 MT tally.

Live cattle futures are mildly weaker this morning. Feeder cattle are under moderate to heavy pressure.

• Feeder cattle are being pressured by strength in the corn market. While corn has backed well off its overnight highs, feeders remain very sensitive to day-to-day price movement in that market given elevated feed prices.
• Live cattle are being influenced by the selling in feeder cattle, though seller interest is limited by the discount futures hold to the cash cattle market.
• Cash cattle traded around steady last week, though the average cash price won’t be known until later today. Traders will wait to form cash opinions for this week as active trade isn’t likely before the middle to later portion of the week.
• Boxed beef prices fell $1.57 in Choice cuts and $1.43 for Select on Friday, while packers moved only 97 loads of product on the day. The wholesale beef market has been trading independent of futures and cash cattle on the extended rally, but there is risk those markets could weaken if boxed beef prices roll over.

Hog futures were $0.15 to $2.325 higher at midsession, with most contracts reaching new highs.

• Strong cash market fundamentals continue to support hog futures, with national barrows and gilt carcasses averaging $109.40 per hundredweight at the end of last week, up from $105.32 the previous week.
• Wholesale pork markets also remain firm. Carcass cutout values averaged $132.63 to close last week, up from $126.59 the previous week, according to USDA.
• July futures extended the sharp upswing of the past few weeks, rising earlier today to a contract high at $123.60.
• The downside is expected to be limited until cash fundamentals signal the rally may be exhausted. Downside levels to watch include last week’s low of $117.20 in July hogs.