Market sizzle still there for wheat which hit above $3.80 last week. Steer carcass weights are pressing a record high, depressing the cash fed market. Higher feed prices starting to knock feeder bids while hog slaughter will take a day off on Monday. Heat has damaged the corn with some predicting a crop below the bench mark 9 billion bushels.
That's the view this week from the market analysts at Agweb.com.
Wheat: The sizzle has not gone out of wheat, but it has lost its headline appeal. New crop September futures in Minneapolis trading soared to above the $3.80 level in ambitious trading last week. The Spring Wheat Quality Tour suggests an 8 percent to 10 percent reduction in yields. Likely Trend: Better to sideways in consolidation phase during HRS and durum harvest. HRW and SRW markets, where harvest is completed, are now dependent on better export news, although KC December futures managed to push above $3.80 this week, boosted by a rallying corn market.
Fed Cattle: Average steer carcass weights are only 3 pounds away from record levels, adding to beef tonnage. Showlists will carry over listings into this week, after a light volume of business last week. The boxed movement has been good, supporting the carcass trade, but not enough to kick start cash. At $63 in light trade, prices are still about $1 lower than feed yard objectives. Likely Trend: Could be looking at weaker cash trade in the coming week on backed up inventories.
Feeder Cattle: The CME Feeder Cattle Index closed out July at 77.90. Lacking any dominant features in auction activity. Markets are seeing a summer lull in offerings and buying interest. Likely Trend: Higher grain prices are once again undercutting feeder values, and reducing demand for fall-offered feeders.
Lean Hogs: The 2-day CME Lean Hog Index stood at 54.46 at midweek. At least four hog slaughter facilities are going to take a "summer holiday" day off Monday, which will reduce this week's kill. That could affect the daily kill of some 30-40,000 head. Based on the previous week's action, it looks like dressed pork supplies are starting to pile up, with weakness in cutout values apt to spread to the cash trade ($2 lower Thursday). So maybe taking a day off isn't a bad idea. Likely Trend: Mixed to lower. Concerns over poor belly movement. No indication that intended fall marketings are being pulled forward, yet, but the trade will watch for evidence of that.
Corn: More heat expected this week, stressing plants that are working on ear fill. The market believes irreversible damage has been done to crop potential, pulling prospects down to near 9 billion bushels in some estimates (Sparks: 8.972 Friday). Some talk that high-temp evening lows may be working against the crop, as well. Farmers have shown little interest in pricing, anticipating higher prices. Likely Trend: Volatile and generally higher until a weather trend change is spotted. CBOT trading margins were increased 22 percent Friday.