Corn, soybean futures rally ahead of Crop Progress report

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Corn futures are trading 32 to 37 cents higher midmorning. New crop corn contracts hit their daily 40 cent trading limit this morning fueled by fears that the current drought in the Midwest will force the USDA to cut yield estimates. Traders consider damage to the crop irreversible, sparking rounds of commercial and noncommercial buying, which helped futures rally 3 percent in the overnight session. USDA is set to release crop condition ratings today and the trade is anticipating another round of cuts for corn condition ratings.

Soybean futures are trading 39 to 47 cents higher midmorning. Soy complex prices are exploding as fears mount concerning the condition of new soybeans due to the Midwest drought. Both the September soybean and soymeal prices hit records highs during the morning session. Traders believe the excessive heat over the last week has further damaged the crop and are concerned that reductions to new crop yield estimates will place global supply and demand in jeopardy. USDA is set to release its crop progress report today, and the trade is expecting to see yet another decline in the soybean good/excellent condition rating.

Wheat futures are trading 22 to 28 cents higher midmorning. Wheat futures are soaring midmorning along with the other grain markets. Wheat futures are mostly being led higher by surging corn prices, but have found support from unfavorable weather as well. Hot dry conditions across the U.S. Plains continue to stress the spring wheat crop, while winter wheat conditions in Russia worsen due to later than normal monsoon rains.

Cattle futures are trading unchanged to 30 cents lower midmorning. The market is trading lower despite last week’s higher cash prices and firm export demand. Market prices are under pressure due to declining boxed beef prices; however look for the lower dollar index to support prices throughout the session.

Lean hog futures are 20 cents to $1 higher midmorning. Hog futures are trading higher on cash premiums to futures prices. The market may see some pressure throughout the day from the struggling pork cutout value.The pork cutout value was under pressure most of last week, falling 51 cents to $90.13 last Friday.



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