Ahead of the Open (VIP) -- December 6, 2013

December 6, 2013 02:22 AM

Corn futures are called mixed amid some fund short-covering and light profit-taking.

  • Corn futures ended the overnight session mixed with nearbys favoring the downside.
  • Corn futures are working on solid weekly gains but still have a lot of work ahead to improve the technical situation.
  • An ag official in China says Syngenta has applied for approval of its Agrisure Viptera product that has resulted in rejection off recent corn shipments to the country.
  • The Viptera situation raises concerns about more U.S. shipments being rejected in the near-term, although the corn is being shipped to other Asian destinations that accept the variety.


Soybean futures are called to open 2 to 5 cents lower despite strong weekly sales data.

  • Soybean futures ended the overnight session mostly around 3 to 7 cents lower.
  • Funds are lightening their long exposure to the soybean market, which has resulting in spread unwinding with corn this week.
  • Soybeans futures are working on losses for the week, but the January contract has held above the psychological $13.00 level.
  • Today's USDA announcement of a 384,150 MT soybean sale to unknown destinations should help to limit pressure. Of the total, 189,150 MT is for 2013-14 delivery, while 195,000 MT is for 2014-15.
  • According to Reuters, a government official says the country is not planning to cut its soy export tax, as was rumored yesterday.
  • Recent pressure has also been tied to favorable weather across the South America, as the crop is off to a solid start.


Wheat futures are called marginally to 1 cent higher on spillover from corn.

  • All wheat flavors are favoring a firmer tone this morning as traders even positions ahead of the weekend.
  • During the overnight session wheat also enjoyed spillover from the corn market as funds lightened their short exposure to the market.
  • Wheat futures are working on sharp weekly losses, which is also leading to light short-covering. But bears clearly hold near-term momentum.
  • This morning's employment report shows the U.S. added 203,000 jobs in November, above expectations of around 180,000 payrolls. The U.S. dollar index is firmer as a result.


Live cattle futures are called to open mixed as traders even positions ahead of the weekend.

  • Live cattle futures are expected to be choppy this morning as traders even positions ahead of the weekend.
  • December live cattle are trading in line with yesterday's $132 cash cattle trade.
  • Cash trade began yesterday at steady prices with last week. Packers resisted raising bids due to negative profit margins even though supplies have tightened.
  • Choice beef values slipped 89 cents and Select was 42 cents lower on light movement of 152 loads.
  • Feeder futures are also expected to be mixed on spillover from live cattle.


Lean hog futures are called to open steady to weaker on followthrough pressure.

  • Lean hog futures are vulnerable to followthrough pressure as bears have near-term momentum on their side.
  • Recent price weakness has eroded the premium December lean hog futures previously held to the cash index, which should limit pressure on the contract ahead of next week's final trading day.
  • The cash hog market is expected to be mostly steady across the Midwest today. The cash market has held up better than expected this week to reflect strong demand for supplies.
  • But expectations are the cash market will soften next week as packers will have no difficulty securing supplies.
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