Corn futures are trading mixed early morning. As of 6:00 am CDT corn futures are trading off 2 and up 8 cents. Corn futures experienced slight volatility during the overnight session but have rebounded to trade on the upside once again. Although the September contract is trading off of yesterday’s record close of $8.13 the market continues to be strengthened by the worst drought in over 50 years. Commercial buying remains strong as weather forecasts show no signs of subsiding heat or rain relief over the next week. However, the market could experience pressure today as traders look to secure profits from yesterday’s impressive rally.
Soybean futures are trading higher early morning. As of 6:00 am CDT soybean futures are trading 24 to 31 cents higher. Soybean futures continued to post double digit gains overnight after closing at a record high of $17.49(August). The market is currently underpinned by sound fundamentals and strong commercial buying due to the worst drought in over half a century. Climate experts have estimated that over 65 percent of the Midwest and High Plains are experiencing drought conditions and traders are concerned yield projects could fall below USDA’s estimate of 40.5 bushels per acre adding further pressure to already low global stocks.
Wheat futures are trading lower early morning. As of 6:00 am CDT wheat futures are trading 5 to 11 cents lower. Prices are being pressured by weakness in the corn markets. Wheat prices experienced a phenomenal rally in prices on yesterday, as did the rest of the grain complex. The market continues to grow more bullish day to day, supported by extreme weather conditions in top wheat producing countries. Traders fear global wheat shortages due to adverse weather in Russia, Australia, Argentina, and India, which should lend support to market on today. Rising demand for wheat as a feed alternative to corn will be another supportive factor for the market.
Cattle futures are called to open higher this morning. The market is expected to open higher ahead of today’s cattle on feed report and cold storage report. Traders are expecting the report to show June placements to be down 1.4 percent from the previous year but expect July cattle supply at feedlots up 2.7 percent from the previous year. However, contracts may experience slight push back as boxed beef prices continue to fall.
Lean hog futures are called to open mixed this morning. The market is expected to open uneven this morning, pressured by rising grain prices and expectations for higher than expected June pork stocks. Analysts expect frozen pork to be up 19% from year ago level but lower than the previous month. On the other hand, prices should see support from tightening supplies and higher cash prices.
Cotton futures are trading mixed early morning as of 6:00 am CDT. Cotton futures are under pressure early morning as the U.S dollar index gains strength. The October contract is supported by poor weather conditions in India (world’s second largest cotton producer). Currently, India’s monsoon rains are approximately 22 percent below average levels in key cotton growing regions.