Ahead of the Open (VIP) -- July 3, 2013

July 3, 2013 03:16 AM

Corn futures are expected to open 3 to 5 cents higher on short-covering.

  • Corn futures ended the overnight session 4 to 5 cents higher on short-covering and news of Chinese corn purchases.
  • Key will be if funds return as active buyers or if traders continue to lighten their long exposure to the market ahead of the July Fourth holiday.
  • Trade sources say China recently booked three cargoes of new-crop U.S. corn as prices were cheaper than domestic supplies. This signals U.S. corn has reached "value" levels.
  • Meanwhile, traders view the near-term weather forecast as non-threatening, which will limit buying to short-covering for new-crop futures.
  • Gulf corn basis is 4 cents firmer for immediate delivery to stand 44 cents over July futures.


Soybean futures are called to open 10 to 20 cents higher on short-covering.

  • Soybean futures ended the overnight session with double-digit gains, with nearbys leading the way amid bull spreading due to tight old-crop supplies.
  • While old-crop futures continue in the steep uptrend from the June low, new-crop futures have trended lower during this same period and are enjoying short-covering this morning.
  • Focus in the market today will be on evening positions ahead of the key July Fourth period.
  • Non-threatening weather will make it difficult for traders to rebuild long positions unless a wave of fresh demand news surfaces.
  • Gulf soybean basis is 2 cents firmer for immediate delivery to stand 64 cents over July futures, with basis for deferred delivery steady.


Wheat futures are called to open 5 to 10 cents higher on short-covering.

  • Wheat futures at all three exchanges enjoyed gains overnight, with Chicago leading the way by posting gains of 6 to 12 cents.
  • Wheat futures were supported overnight by reports that China has booked around 700,000 MT to 800,000 MT of "overseas wheat" on the price break.
  • If realized, fresh demand news of this magnitude would help the market build a base of support and secure a harvest low.
  • This morning USDA has confirmed purchases of 360,000 MT of U.S. SRW wheat for 2013-14.
  • Winter wheat harvest is thought to have crossed the halfway point by this time, which has traders anticipating the bulk of hedge-related pressure is now behind the market.
  • Gulf SRW wheat basis is 4 cents firmer this morning to stand 44 cents over July futures to suggest a pickup in demand.


Live cattle futures are called steady to weaker on light followthrough pressure.

  • Live cattle futures softened into the close yesterday to post slight losses, raising the risk of followthrough pressure this morning.
  • But pressure should be limited as traders are still anticipating at least steady cash cattle trade given this week's tighter showlist.
  • But the boxed beef market has been unimpressive this week. Choice values firmed 46 cents and Select rose 84 cents yesterday, but movement was lackluster at just 168 loads.
  • No active bidding has been reported, which suggests cash trade will likely be delayed until after July Fourth.
  • Feeder cattle futures are vulnerable to profit-taking as well as strength in the corn market.


Lean hog futures are called steady to lower on weakness in the pork cutout market.

  • Lean hog futures are vulnerable to followthrough from yesterday's losses, although futures came well off session lows into the close.
  • But traders are concerned about the cash hog market after pork cutout values slipped another $1.56 yesterday. Movement improved to 384.58 loads of cuts and 21.17 loads of trim, but cutout values have slipped more than $4 from their late-June peak.
  • The cash hog market is expected to be mostly steady today, but a mixed tone could develop due to variable demand.
  • Some plants are in need of additional supplies, while others have scaled back kill requirements due to the holiday.
Back to news


Spell Check

No comments have been posted to this News Article

Corn College TV Education Series


Get nearly 8 hours of educational video with Farm Journal's top agronomists. Produced in the field and neatly organized by topic, from spring prep to post-harvest. Order now!


Market Data provided by QTInfo.com
Brought to you by Beyer