Ahead of the Open (VIP) -- December 10, 2013

December 10, 2013 02:16 AM
 

Corn futures are called 1 to 3 cents lower as traders focus on evening positions.

  • Corn futures ended the overnight session mostly around 1 to 2 cents lower as traders move to the sidelines ahead of this morning's USDA reports.
  • USDA says despite weather difficulties, the December Supply & Demand Report will be issued as scheduled this morning at 11:00 CT. NASS does not release updated corn and soybean crop estimates in December.
  • According to pre-report expectations, the S&D Report is expected to show a slight decline in 2013-14 carryover from last month to around 1.861 billion bushels. While down from last month, this still represents plentiful supplies.
  • Meanwhile, Brazil's crop-estimating agency, Conab, pegs the country's corn crop at 78.8 MMT, versus a range of 78.5 MMT to 79.8 MMT last month.
  • Gulf corn basis is 1 cent weaker for immediate delivery, steady for January and up 2 cents for February shipment.

 

Soybean futures are expected to see a mixed start ahead of USDA's reports.

  • Soybean futures ended the overnight session narrowly mixed, with nearbys around a penny higher and deferreds steady to a penny weaker.
  • Traders are focused on moving to the sidelines ahead of this morning's USDA reports. According to pre-report expectations, traders look for 2013-14 carryover to come in around 154 million bu., which, if realized, would be down 16 million bu. from last month.
  • Meanwhile, Brazil's forecasting agency, Conab, has raised its forecast of the country's soybean crop to a record 90.03 MMT. It previously pegged the crop in a range of 87.9 MMT to 90.2 MMT.
  • Heavy rains that are expected to continue across Mato Grosso, Brazil, this week are raising concerns about the spread of rust. But the wet forecast is favorable for other regions of the country.
  • Gulf soybean basis is steady this morning to stand 99 cents over January futures for immediate delivery.

 

SRW and HRW wheat futures are called 2 to 4 cents lower, with lighter losses expected in the HRS market.

  • SRW and HRW wheat futures ended the overnight session mostly in the range of 2 to 4 cents lower, with the HRS market marginally to 1 cent lower.
  • Traders' focus is on evening positions ahead of this morning's USDA reports. Traders expect 2013-14 wheat carryover to come in around 553 million bu., which, if realized, would be down 12 million bu. from last month.
  • Meanwhile, Brazil's Conab has raised its peg of the country's wheat crop to 5.36 MMT, up from 4.81 MMT in November.
  • Gulf SRW wheat basis is steady this morning to stand 90 cents over March futures for immediate delivery.

 

Live cattle futures are expected to favor a firmer tone in mixed trade due to weather concerns.

  • Live cattle futures are called mixed as traders wait on this morning's USDA report data. But a firmer tone is expected given stressful feedlot conditions across the Plains and Midwest.
  • Strength in the beef market is also a positive for this week's cash negotiations, as Choice values firmed $1.05 yesterday and Select rose $1.14. But only 127 loads changed hands.
  • With showlists up from last week, expectations are for steady-at-best cash trade later this week. Last week the bulk of cash cattle traded at $132.
  • Price action in feeder futures will be limited as nearbys are trading in line with the cash index.

 

Lean hog futures are called mixed, with pressure limited by travel disruptions.

  • All but the front-month lean hog contract were supported yesterday by winter weather concerns. Blowing snow across areas of the Corn Belt and Eastern U.S. this morning should limit pressure to profit-taking.
  • Meanwhile, demand for cash supplies was lighter than expected yesterday, which signals packers expect movement to pick up as the weather improves.
  • Expectations are for steady to weaker bids again today, although some firmer bids are possible if packers are in need of supplies.
  • Pork cutout values firmed 3 cents yesterday on light movement of 304.57 loads due to less-than-favorable weather.
  • December lean hog futures have the responsibility of tracking the cash market closely ahead of its expiration later this week.
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