Ahead of the Open (VIP) -- January 21, 2014

January 21, 2014 02:19 AM

Corn futures are called 2 to 3 cents lower on spillover from soybeans.

  • Corn futures ended the overnight session mostly around 2 cents lower on spillover from soybeans and slight strength in the U.S. dollar index.
  • While rains are too late to do more than stabilize the corn crop in Argentina, they are helping to boost late-planted corn.
  • Meanwhile, Chinese officials say they will continue to stockpile corn but focuses are on increasing domestic production.
  • Traders also remain discouraged about the ongoing delays in China's regulatory process to approve unapproved GMO corn varieties.
  • Gulf corn basis is steady this morning to stand 72 cents over March futures for immediate delivery.


Soybean futures are called 10 to 18 cents lower on improved Argentine weather.

  • Soybean futures ended the overnight session 10 to 17 cents lower, with nearbys leading the decline.
  • Futures started the week under pressure after favorable rains and cooler temps were seen across Argentine over the weekend.
  • Adding to price weakness is news that another 23 human cases of H7N9 bird flu were reported in China. While the number of cases is on the rise, the government has not recommended travel restrictions ahead of the upcoming Lunar New Year celebrations.
  • The Chinese government announced it will end its stockpiling program for soybeans in 2014 in favor on direct subsidies to farmers, as expected. But the country will still rely on imports to fill much of its soybean demand.
  • Gulf soybean basis is steady this morning to stand $1.20 over March futures for immediate delivery.


Wheat is called mixed amid position squaring.

  • Wheat futures favored a firmer tone in overnight trade amid ideas recent losses were overdone.
  • Some spread unwinding with corn and soybeans is also providing light support in the wheat pit this morning.
  • Limiting buying in the wheat pit is strength in the U.S. dollar index, which hit a nine-week high early today.
  • Dollar bulls have the clear near-term technical advantage which raises concerns about the competitiveness of U.S. wheat on the global market.
  • Gulf SRW and HRW wheat basis is steady this morning.


Live cattle futures are called higher due to ongoing strength in the beef market.

  • Live cattle futures are expected to see a boost from ongoing strength in the beef market.
  • Choice beef values posted sharp gains yesterday, rising to a record $236.56 per cwt.; Select rose to a record $234.45. Movement was light at 99 loads.
  • All eyes will be on the beef market early this week as traders wait on cash clues after packers paid up to $144 for supplies last week. The bulk of cattle moved at $142.
  • Meanwhile, live cattle are severely overbought according to the 9-day Relative Strength Index, which signals a time or price correction is due.
  • Slight weakness in the corn market is supportive for feeder futures this morning.


Lean hog futures are called steady to firmer on spillover from live cattle.

  • Lean hog futures are expected to see a boost on spillover from live cattle, as well as support from winter weather.
  • A storm that moved across the Midwest yesterday and overnight is expected to limit hog marketings today. As a result, the cash hog market is called steady to higher.
  • Additionally, some packers are short bought on slaughter needs, which is adding to improved demand for cash hogs.
  • Pork cutout values firmed 33 cents on Monday, but movement slowed to 276.31 loads. Traders will be keeping a close eye on the pork market this week as it has benefited recently from the record-setting rise in the beef market.
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