Ahead of the Open (VIP) -- August 30, 2013

August 30, 2013 03:13 AM
 

Corn futures are called to open 1 to 3 cents lower amid pre-holiday trade.

  • Corn futures ended the overnight session 1 to 3 cents lower on forecasts for milder temps next week.
  • Extreme heat is expected to linger across the Corn Belt into the weekend, but funds are hesitant to rebuild a long position as forecasts call for milder temps next week and they are concerned demand will soften if prices surge.
  • There are chances of isolated showers early next week, but so far the forecast does not call for widespread relief after heat stressed filling crops this week.

 

Soybean futures are called to open 6 to 11 cents lower on profit-taking.

  • Soybean futures ended the overnight session 6 cents lower in the front-month contract, with new-crop futures mostly around 11 cents lower.
  • Traders' focus is on evening positions ahead of the Labor Day holiday. The markets will observe regular trading hours today but be closed on Monday.
  • Traders are taking some profits as forecasts call for milder temps next week and a chance of isolated showers.
  • But yesterday's NWS 6- to 10-day outlook calls for below-normal precip across the Corn Belt, which is not favorable pod-filling weather.
  • Also this morning, USDA announced a 110,000 MT soybean sale to China for 2013-14, which represents continued demand at high prices.

 

All wheat flavors are called mixed amid position squaring.

  • SRW and HRW wheat ended the overnight session narrowly mixed, with HRS futures marginally to 1 cent higher.
  • Wheat is benefiting from some short-covering, but gains will be limited by negative outside markets and weakness in the corn and soybean markets.
  • Following yesterday's losses, wheat is due for a corrective bounce, but it has a lot of work ahead to signal near-term lows have been posted.
  • Wheat needs constant demand news to re-energize bulls.

 

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

  • Focus in the cattle market will be on position squaring as traders wait on cash trade to begin.
  • Packers so far this week have shown limited interest in bidding for cattle and feedlots are waiting on higher prices.
  • This week's showlist is up from last week after feedlots carried supplies over, which lowers their bargaining power in cash negotiations.
  • The boxed beef market has been lackluster this week. Choice values slipped 57 cents yesterday on just 135 loads changing hands.
  • Slight weakness in the corn market this morning is supportive for feeder cattle futures.

 

Lean hog futures are called to open mixed in pre-holiday position squaring.

  • Traders in the hog pit will be focused on evening positions ahead of the holiday weekend. As a result, price action is expected to be choppy.
  • But nearby futures are vulnerable to profit-taking following yesterday's strong gains in nearby contracts.
  • The cash hog market has been choppy this week, but packers say they have needs secured and have no urgency to bid up for hogs to end the week.
  • Pork cutout values slipped 73 cents yesterday on solid movement of 344.1 loads.
  • There is still more upside potential for nearby futures based on the sharp discount those contracts hold to the cash index.
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