Ahead of the Open (VIP) -- August 22, 2013

August 22, 2013 03:04 AM
 

Corn futures are called 3 to 6 cents lower on profit-taking.

  • Corn futures ended the overnight session 1 to 7 cents lower on profit-taking. Key this morning will how funds position themselves.
  • Day 3 of the Midwest Crop Tour revealed a corn yield in Illinois of 170.48 bu. per acre, which compares to 121.60 bu. per acre last year and a three-year average of 148.04 bu. per acre.
  • Scouts wrap up their sampling of the variable Iowa and Minnesota crops today.
  • Rains moving into drought areas of the western Corn Belt today are adding to price weakness.
  • Meanwhile, this morning's weekly export sales data shows sales of 58,200 MT for 2012-13 and sales of 434,400 MT for 2013-14 delivery -- falling short of expectations.

 

Soybean futures are expected to be mostly 4 to 10 cents lower on profit-taking.

  • Soybean futures ended the overnight session 4 to 12 cents lower, although far deferreds were mostly firmer.
  • Day 3 of the Midwest Crop Tour revealed Illinois soybean pod counts in a 3'x3' square of 1,115.97, which compares to 944.05 last year and a three-year average of 1,149.47.
  • Traders will be watching for reports from scouts as they sample the remainder of Iowa and head into Minnesota.
  • Rains moving into the western Corn Belt this morning are adding to some profit-taking, although showers are not expected to be widespread.
  • Traders are disappointed by this morning's weekly export sales data, although it reveals still-strong demand. Soybean sales of 20,900 MT were reported for 2012-13 and 926,000 MT in sales were reported for 2013-14.

 

Wheat futures are called 2 to 4 cents lower on spillover from neighboring pits.

  • All wheat flavors ended the overnight session mostly 2 to 4 cents lower.
  • Wheat remains in a follower's role, although the market has been influenced by action in the dollar index this week.
  • A stronger U.S. dollar index this morning is adding to the negative tone in the wheat pit.
  • This morning's weekly export sales data is neutral for wheat, as sales of 494,000 MT for 2013-14 matched expectations.
  • However, a 5-cent boost in Gulf basis for immediate delivery signals improved demand.

 

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

  • Live cattle futures are called mixed as cash trade has been delayed.
  • Front-month August live cattle ended yesterday at around a $1 premium to the cash market, which signified positive cash expectations.
  • Packers' initial bids came in at $121 yesterday in the Southern Plains, but asking prices are $4 to $5 above these levels.
  • Given this week's tighter showlists, feedlots hold more bargaining power.
  • Yesterday, Choice and Select values slid 14 and 38 cents, respectively, but movement did pick up to 195 loads.
  • Weakness in the corn market is expected to be supportive for feeder futures.

 

Lean hog futures are called mixed on a combination of followthrough pressure and short-covering.

  • Lean hog futures are due for a short-covering bounce following yesterday's losses, although attitudes have turned bearish.
  • Futures should favor a weaker tone given yesterday's $2.50 drop in pork cutout values.
  • But the sharp drop in pork cutout resulted in a pickup in movement, which signals prices could stabilize.
  • The cash hog market is called steady to weaker due to building supplies, which gives packers no incentive to raise bids.
  • Pressure on nearby contracts will likely be kept in check by the steep discount they maintain to the cash hog index.
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