Wheat Takes Lead On Demand Front
Nov 14, 2013
Good Morning! Paul Georgy with early morning comments for November 14, 2013 at 5:00 am. Grain futures are mixed. Wheat sees strength from numerous tenders in the world market. Corn and soybean traders seem to be picking each other’s pockets as they wait for some news to push prices out of trading range.
After the last USDA report on corn and soybean production for 2013, it is likely the trade will be looking for guidance on price direction to come from demand and South American weather. China will be the key focus for a pickup in purchases to offset the large US supplies.
Domestic demand for soybeans continues to provide support for the soy complex. Crush margins are very favorable and reports of a Midwest pushing bids to get enough supply. This is another sign that farmers are reluctant to sell before the first of the year.
The USDA Weekly Export Sales Report has been pushed back until tomorrow morning due to Monday’s holiday. The NOPA crush data will be released on Friday at 11:00 AM. Trade will also be watching for any changes in demand from the Philippines due to recent typhoon damage. There are estimates of major losses to their coconut crop.
Wheat basis at the gulf is showing some improvement as US wheat is getting competitive in the world market. There is talk Brazil booked 2 cargoes of US Hard Red Winter wheat for shipment yet this year.
South American weather is starting with ideal conditions to get their crops off to a good start. Traders will be watching for any indication that dryness may set in.
Trading volume was moderate yesterday in the CME grains. Funds are estimated to have sold a net 5,000 corn contracts, were even in wheat and bought 2,000 soybean contracts. Traders are watching fund positions closely as they are currently carrying a large short position in corn.
Cash hog weights hit record high levels on Wednesday in IA-MN. Pork cutout values slid $3.05, led by bacon prices. Lean Hog futures for December are testing October lows and nearing the 100 day moving average of 85.25.
Cash cattle bids are developing at 128 to 129 in the south with feedlots asking 133 to 135. Trade feels that we should get a steady trade this week. Competition for other meats is making it difficult for packers to become aggressive on beef. Cutout values for choice beef was up .75 while select was down .05. The CME Feeder Index was set at 165.50.
Markets as of 5:00 AM
- Dec Corn + 1/4
- Jan Beans -5 3/4
- Dec Wheat +5 1/2
- Dec Cattle +.35
- Dec Hogs -.42
- Dec Dlr +.23
- Dec S&P +4.00
- Dec Crude -.11
- Dec Gold +15.10
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