Ahead of the Open (VIP) -- December 9, 2013

December 9, 2013 02:16 AM

Corn futures are called marginally to 1 cent lower amid lackluster trade.

  • Corn futures didn't stray too far from unchanged in overnight trade, although the market fell from firmer levels seen earlier to finish the overnight session marginally lower.
  • Back-and-forth price action is expected today amid a lack of fresh news and as funds reevaluate positions.
  • Traders will also be focused on evening positions ahead of tomorrow's USDA December Supply & Demand Report. The report is expected to show a slight decline in 2013-14 carryover from last month to around 1.861 billion bu., which is still plentiful.
  • Gulf corn basis is steady to 1 cent higher for nearby delivery this morning to stand 67 cents over March futures for immediate shipment.


Soybean futures are called 3 to 7 cents higher on recent demand improvements.

  • Soybean futures ended the overnight session 3 to 7 cents higher and near session highs.
  • Upside momentum built through the overnight session, setting the stage for the possibility of an even stronger open, especially given recent better-than-expected demand from China.
  • According to official customs data, China imported 6.03 MMT of soybeans in November, up 43.9% from October. Year-to-date imports of 55.97 MMT are up 6.6% from year-ago.
  • Also supportive this morning is USDA's announcement that China purchased 290,000 MT of soybeans. Of the total, 230,000 is for 2013-14 and 60,000 MT is for 2014-15.
  • Traders' focus is also on evening positions ahead of tomorrow's USDA S&D Report, which is expected to show 2013-14 carryover around 154 million bu., which, if realized, would be down roughly 16 million bu. from last month.


All wheat flavors are called marginally to 1 cent higher, although the market could open mixed.

  • All wheat flavors ended the overnight session marginally higher, but this was near session lows thanks to spillover from corn.
  • Weakness in the U.S. dollar index helped to limit pressure on wheat futures, although wheat needs a dose of fresh export news to reignite bulls.
  • Meanwhile, traders' focus will be on evening positions ahead of tomorrow's USDA S&D Report. Traders expect the data to show 2013-14 wheat carryover at 553 million bu., which, if realized, would be down 12 million bu. from last month.


Live cattle futures are called steady to firmer on concerns about stressful feedlot conditions.

  • Live cattle futures are expected to be mixed with a positive basis amid weather concerns.
  • Concerns about winter weather stressing feedlots across the Plains is expected to lift futures this morning.
  • However, upside potential will be limited by weakness in the beef market. Choice beef values slipped 94 cents on Friday and Select plunged $2.64 amid slow movement of 157 loads to push packer profit margins farther into the red.
  • While live cattle posted sharp losses last week, no major technical chart damage was done as contracts remain in their overall uptrends.
  • December live cattle are trading at a slight discount to last week's $132 cash cattle trade.


Lean hog futures are called steady to firmer on weather concerns.

  • Hog futures are expected to to see a firmer start on concerns that wintry weather across the Corn Belt will slow marketings.
  • The cash hog market is called steady to firmer as packers work to secure this week's supplies and some will have to bid up due to winter weather.
  • While market-ready supplies are abundant, packers have room to raise bids, especially due to inclement weather and positive profit margins.
  • Pork cutout values firmed 99 cents on Friday on light movement of 312.87 loads.
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