Market report

Corn
Corn is expected to open 4 to 5 cents higher this morning.
Futures were up a sharp 10 3/4 to 14 3/4 cents on Wednesday,
as the wheat market showed the way higher and trapped corn
shorts headed for cover. A weaker US dollar also supported
the rally, although the actual corn fundamentals (and
opinions thereof) have driven the volatile price action more
than the currencies lately. Ethanol futures followed the
corn higher, up 3.2 cents/gallon to $1.641. Ethanol is still
cheap vs. gasoline. Weekly export sales were on the light
side at 960,400 MT due to a large old crop cancellation of
301,800 MT from unknown destinations. Futures were up 4 to 5
1/2 cents overnight on Globex.


Soybeans
Soybean preliminary calls are 6 to 9 cents higher. Meal
jumped $7.20 to add to product margin, and soy oil was also
28 points higher. US export soybeans are currently anywhere
from 20-25 cents below Brazil for August shipment, even with
the $10 handle on the futures. On paper South America has a
lot more beans available to sell than last year, but they
don't appear to be in a hurry to part with the rest of them.
This morning's Census Fats & Oils report bumped up the U.S.
soy oil ending stocks for June to 3.555 billion pounds from
the flash estimate of 3.547 billion and 3.465 billion in
May. Soybean futures in China were up 10 cents per bushel.
They were up 5 to 6 ½ cents overnight on Globex. Weekly
export sales through July 22 were very strong at 1.48 MMT.


Wheat
Wheat is expected to open 8 to 12 cents higher. The US
market was reacting to new contract highs for French wheat
on the Euronext exchange overnight. CHI was up 12 3/4 to 20
1/2 cents, with September up the most. KC rose 15 to 15 3/4,
and MPLS was up 13 3/4 to 17 1/2 cents. The KC cash market
didn't play along, with protein basis sliding 8 to 15 cents
for anything below 12.5% protein. French futures for
November hit a new contract high of $193.75/MT overnight
($5.27 per bushel) on new Ukrainian quality testing
requirements for export wheat that could limit exports.
Weekly US export sales through July 22 jumped to 919,900 MT.


Cattle
Cattle are called 15 lower to 15 higher this morning. For
the most part, the market is still waiting on weekly cash
cattle trade to develop, or for hints as to which way it was
going to go. The higher hog prices yesterday were
supportive. Choice boxes were down 53 cents at $154.70 on
Wednesday, while Select was quoted 61 cents higher at
$146.34 as the spreads relaxed.



Hogs
Hogs are called 20 to 40 cents higher this morning. The pork
market is on fire, with the quote for the carcass up $2.49
yesterday to $89.35. All of the primals were up, but the
belly quote was a huge $9.75 higher after the surprisingly
tight supplies in the weekly belly movement report on
Tuesday. The belly number is looked upon with some
suspicion, but late summer pork supplies are tight, and the
weekly cold storage report did confirm limited inventory.
Hog carcass weights have crept up, and Iowa numbers are 2.1#
above 2009 for the same period.


Cotton
Cotton is trading 10 to 25 points higher this morning, with
a weaker US dollar. Prices were down 39 to 88 points on
Wednesday, with unwinding/profit taking in the Oct/Dec
spreads. Cert stocks continue to collapse, and are down to
50,825 bales as they are shipped out for other uses. October
futures OI is limited for good reason. There may not be much
cotton in the warehouses to be delivered. For this morning,
traders are looking for USDA to show net cotton export sales
of 300-400,000 running bales for the week ending July 22.