Ahead of the Open (VIP) -- June 13, 2013

June 13, 2013 03:16 AM
 

Corn futures are called marginally to 2 cents lower on light followthrough from yesterday's losses.

  • Corn futures ended the overnight session marginally to around a penny lower, but didn't stray too far from unchanged following yesterday's sharp losses.
  • Traders are still digesting yesterday's S&D Report in which USDA cut new-crop corn carryover less than expected.
  • USDA's data was deemed negative yesterday, giving bears more staying power.
  • But another wave of showers moved across the Upper Midwest yesterday, adding to concerns about stands and crop conditions.
  • This morning's weekly export sales data showed corn sales of 81,500 MT for 2012-13 and 68,000 MT for 2013-14, coming in below expectations.

 

Soybean futures are called 5 to 10 cents lower on profit-taking.

  • Soybean futures ended the overnight session 4 to 9 cents lower across the board following yesterday's losses in all but the front-month contracts.
  • Traders still have yesterday's USDA data on their minds, in which USDA left its old- and new-crop carryover pegs unchanged. This was slightly positive for new-crop futures as traders expected USDA to raise its projection slightly from last month.
  • Pressure on new-crop futures is being limited by concerns about planting delays, although traders don't believe this is a major threat to the crop at this point.
  • This morning's weekly sales data showed soybean sales of 33,500 MT for 2012-13 and 447,100 MT for 2013-14, which came within expectations.
  • Soybean meal and soyoil sales also came within expectations.

 

Chicago and Kansas City wheat are called 1 to 2 cents lower, with Minneapolis expected 2 to 3 cents higher.

  • Chicago and Kansas City wheat ended the overnight session mostly 1 to 2 cents lower, while Minneapolis futures were 2 to 3 cents higher.
  • Ongoing planting delays and slow growth of the spring wheat crop are helping to lift Minneapolis futures this morning, while harvest-related hedge pressure is limiting buying to short-covering in the Kansas City market.
  • Traders still have yesterday's USDA data on their minds, in which the agency raised the size of the winter wheat crop more than expected.
  • This morning's weekly export sales data showed wheat sales of 427,200 MT for 2013-14, which was within expectations. A total of 1,185,500 MT was carried over from 2012-13.

 

Live cattle futures are called to open mixed as traders wait on cash cattle trade to begin.

  • Live cattle ended the yesterday mixed, with nearbys slightly lower on uncertainty surrounding this week's cash cattle trade.
  • With this week's showlist up slightly from last week after many feedlots carried market-ready supplies over last week, traders has been keeping a close eye on the boxed beef market for cash clues.
  • Choice beef values softened $1.20 yesterday and Select firmed 15 cents, which isn't a good sign for stabilization in the cash market.
  • But beef movement improved to 246 loads, which could improve packers' demand for cash supplies.
  • Feeder cattle futures were moderately to sharply higher yesterday and are expected to see followthrough buying this morning, as well as support from weakness in the corn market.

 

Lean hog futures are called to open mixed as traders reevaluate positions.

  • Lean hog futures closed slightly to moderately higher yesterday, with June hogs closing just beneath the $101 level. With futures overbought, traders are reevaluating positions.
  • The positive technical situation has continued to build on itself, so key will be if traders decide to take profits or continue to extend long positions.
  • Fundamental support has been coming from tightening market-ready supplies and talk that China is buying U.S. pork.
  • This morning's weekly export sales report includes sales of 2,800 MT to Hong Kong.
  • The pork cutout market is also a supportive factor for the hog market. Pork cutout values firmed $1.27 yesterday on solid movement of 377 loads.
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