Wheat: New contract highs were set several days this week in MGE trading. Expect some profit taking on recent gains. Spring wheat harvest is winding down. Isolated areas of the plains region from Texas to South Dakota have been banking some moisture this week, which could help rejuvenate seedbeds for winter wheat seedings next month. KC July '03 futures have been capped the past three weeks at the $3.70 level; CBT July flinched at $3.50. Likely Trend: Spring wheat still has a sharp uptrend. But at companion exchanges, gains are hard won, as the market flattens. Export business has gone to competitors.
Fed Cattle: Limited change in prices offered this week. Weekly cash trade is still mostly confined to one day a week. Seasonally, retailers know there can be a swoon in grill demand after Labor Day. Pork offers cheap competition at meat cases, given the pork surplus. Likely Trend: Expect continued weakness because of an overall meat glut. Lots appear current, to help matters.
Feeder Cattle: The CME Feeder Cattle Index stood at 79.79 at midweek. October feeder futures have gradually worked their way back to near $80, but the cash trade has been more bashful. Auctions continue to see sacrifice sales of pairs or calves coming down out of summer mountain pastures, carrying poor fleshing as the result of distressed conditions. Likely Trend: Fall demand for auction offerings is tentative. The trend shows prices improving, but both buyer and seller are uneasy for the moment.
Lean Hogs: Cash hog prices were beaten lower this week, pressured by heavy runs and the need to discount dressed pork to get it to move. Sows are now selling in the teens. This is a crippled situation. With large runs, there is no quick fix. Breeding herd liquidation will likely be confirmed in the late September quarterly Hogs & Pigs Report. The 2-day weighted average cash-settled CME Lean Hog Index stood at 39.53 at midweek. Likely Trend: Continued pressure in the cash trade. Be wary if weekly kill totals approach 2 million head.
Corn: This market is emotionally spent, and will welcome light holiday action to recuperate before regaining energy into the September 12 USDA crop forecast update. Markets are realizing on-farm storage will provide enough bin space for this smaller crop, and buyers will need to keep basis narrow. Harvest pressure will be lessened. But, chart damage has been done in this week's price slide, penetrating support areas, and allowing more downside. Likely Trend: Choppy and uncertain, but with a slight downward bias. Easier prices may inspire some extra demand news if exporters or domestic users need to extend coverage.