Ahead of the Open (VIP) -- August 15, 2013

August 15, 2013 03:15 AM
 

Corn futures are called 8 to 10 cents higher this morning on weather concerns.

  • Corn futures ended the overnight session 6 to 9 cents higher. Funds are expected to lighten their long exposure to the market this morning given weather concerns.
  • Weather models show warmer temps moving into the Corn Belt next week, accompanied by dry conditions in the western Belt.
  • This morning's National Drought Monitor shows drought has spread across Iowa and into central Illinois.
  • This morning's Weekly Export Sales Report shows reductions of 59,100 MT for 2012-13, which were offset by sales of 836,100 MT for 2013-13 to help the combined tally come in above expectations.
  • Traders are also sorting through initial FSA certified acreage data, as it gives an indication of Prevent Plant claims.
  • Gulf corn basis is up 3 cents this morning for immediate delivery to stand 97 cents above September futures to reflect tight old-crop supplies.

 

Soybean futures are called 10 to 15 cents higher on concerns about building heat next week.

  • Soybean futures ended the overnight session 7 to 13 cents higher on weather concerns. Key this morning is if funds return as buyers to extend their long position.
  • Weather was a supportive factor for soybean futures overnight, as warmer temps are expected in the Corn Belt next week, accompanied by below-normal precip across the western Belt.
  • Traders are also noting the spread of drought across the central Corn Belt as reflected by the National Drought Monitor.
  • Also supportive is this morning's Weekly Export Sales Report. While net soybean sales reductions of 10,500 MT were reported for 2012-13, sales of 1,893,400 MT for 2013-14 were well above expectations.
  • Gulf soybean basis is steady this morning across all months to stand $1.50 above November futures for immediate delivery.

 

Wheat futures are called 3 to 5 cents higher on spillover from neighboring pits.

  • All wheat flavors ended the overnight session mostly 3 to 4 cents higher on spillover from corn and soybeans.
  • But demand remains a limiting factor for the wheat market as U.S. prices are above global competitor prices.
  • This morning's weekly sales report showed wheat sales of 490,100 MT for 2013-14 and 5,500 MT for 2014-15 to come in below expectations.
  • Gulf SRW wheat basis reflects a softening of demand as it is down 5 cents this morning for immediate delivery to stand 30 cents above September futures.

 

Live cattle futures are called to open mixed as traders wait on cash trade to begin.

  • Live cattle futures are expected to be mixed as packers and feedlots are several dollars apart on cash negotiations.
  • But given tight market-ready supplies and strength in the boxed beef market, pressure on live cattle will be limited.
  • Choice beef values firmed $2.03 yesterday and Select rose $1.40 on solid movement of 208 loads.
  • Tight calf supplies will limit pressure on feeder futures this morning, although slight strength in the corn market will contribute to some profit-taking.

 

Lean hog futures are expected to be mixed following yesterday's gains due to some profit-taking.

  • Lean hog futures are expected to be mixed on a combination of followthrough from yesterday's sharp gains and some profit-taking.
  • Nearby lean hog futures surged yesterday on talk that pork demand had picked up. This was confirmed by the pork cutout market report, which showed 482.4 loads of cuts had changed hands.
  • However, pork cutout values slipped 54 cents yesterday to tighten packers' profit margins.
  • The cash hog market is still called steady to firmer as some packers are in need of late-week supplies.
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