Ahead of the Open (VIP) -- August 23, 2013

August 23, 2013 03:04 AM
 

 

Corn futures are called 5 to 10 cents higher on a continuation of fund buying.

  • Corn futures ended the overnight session 3 to 7 cents higher, with funds expected to extend overnight gains in early daytime trade.
  • Traders view yesterday's losses as overdone, especially given the forecast that calls for a building ridge of high pressure next week that is expected to block moisture and result in rising temps.
  • Day 3 of the Pro Farmer Midwest Crop Tour revealed a corn yield in Iowa of 171.94 bu. per acre, which compares to 137.27 bu. per acre last year and a three-year average of 157.09 bu. per acre.
  • In Minnesota, the Tour found a corn yield of 181.09 bu. per acre, which compares to 156.19 bu. per acre last year and a three-year average of 172.53 bu. per acre.
  • Gulf corn basis for immediate delivery is up a dime this morning to stand $1.35 over September futures.
     

Soybean futures are called 15 to 20 cents higher on weather concerns.

  • Soybean futures ended the overnight session 14 to 17 cents higher. Key this morning will be if funds extend overnight gains.
  • Concerns about building heat and dryness across the Corn Belt next week due to forecasts for a high pressure ridge supported bean futures overnight.
  • Traders are also reacting to below-three-year-average soybean pod counts from the Crop Tour.
  • Day 3 of the Tour revealed Iowa soybean pod counts in a 3'x3' square of 927.30, which compares to 999.80 last year and a three-year average of 1,189.74.
  • Minnesota soybean pod counts in a 3'x3' square totaled 869.42, which compares to 934.35 last year and a three-year average of 1,099.44.
  • Gulf soybean basis is steady this morning for immediate delivery to stand $1.40 over November futures.

 

SRW and HRW wheat are called 1 to 5 cents higher, with HRS mixed.

  • SRW and HRW wheat enjoyed spillover from the corn market overnight, with HRS futures mixed.
  • Key for wheat futures this morning is if funds extend gains in the corn market, as wheat remains in a follower's role.
  • Traders still have Canadian crop estimates on their mind from earlier in the week, which reflected the potential for a near-record crop.
  • Gulf SRW wheat basis is steady this morning to stand 35 cents above September futures.

 

Live cattle futures are called to open mixed as traders even positions ahead of the Cattle on Feed Report.

  • Live cattle futures should favor a firmer tone as traders expect this afternoon's Cattle on Feed Report to reflect a tightening feedlot situation.
  • The report is expected to show On Feed at 95.8%, Placements at 97.5% and Marketings at 104.4% of year-ago levels.
  • Traders are still waiting on cash cattle trade to develop. While market-ready supplies continue to tighten, packers haven't raised bids and feedlots are asking for $1 to $2 above last week's $123 trade.
  • Boxed beef prices were also stronger this week, but movement slowed. Choice values firmed another 38 cents yesterday and Select rose 84 cents on just 113 loads.
  • A firmer tone in the corn market could lead to some profit-taking in the feeder market.

 

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

  • Lean hog futures are due for a corrective bounce, but the technical posture of the market has turned bearish.
  • Nearby lean hog futures have extended the discount it holds to the cash index, which could trigger some pre-weekend short-covering.
  • Meanwhile, buying will be limited as traders expect seasonal price pressure to build.
  • Pork cutout values slipped 8 cents yesterday on lackluster movement of 385.3 loads.
  • The cash hog market is called steady to mostly lower today as packers have had no difficulty securing this week's supplies and are already working on next week's needs.

 

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