Ahead of the Open (VIP) -- June 14, 2013

June 14, 2013 03:13 AM

Corn futures are expected to favor a firmer tone on followthrough buying from late-gains in overnight trade.

  • Corn futures ended the overnight session steady to 6 cents higher through the July 2014 contract, with far deferreds mixed.
  • Traders' focus is on evening positions ahead of the weekend.
  • Gulf corn basis is 3 cents firmer for delivery the second half of June to stand 85 cents above July futures to reflect tight supplies and possibly some fresh demand.
  • Meanwhile, traders view recent weather conditions as mostly favorable for the developing corn crop. Producers in the Central and Upper Midwest, however, are concerned about the lagged development of the crop and uneven emergence.
  • Corn futures are poised to post moderate losses for the week.


Soybean futures are called 5 to 10 cents higher on short-covering following yesterday's losses.

  • Soybean futures ended the overnight session mostly 5 to 9 cents higher on ideas yesterday's losses were overdone.
  • Old-crop futures are leading gains amid bull spreading due to tight old-crop supplies.
  • Gulf soybean basis is up 2 to 7 cents for June and July delivery to reflect some fresh demand has surfaced.
  • Forecasts for more rains over the weekend across the Corn Belt are raising concerns about planting delays, although the perception in the market that "rain makes grain" is limiting buying interest.
  • Soybean futures have seen a highly choppy week of price action and are currently trading below last week's closing levels.


Wheat futures are called 1 to 3 cents lower on a lack of fresh demand news.

  • Chicago and Kansas City wheat ended the overnight session mostly 1 to 3 cents lower, with Minneapolis wheat favoring a weaker tone in mixed trade.
  • Wheat futures need a dose of fresh demand news to lift traders' spirits and that appears unlikely as trading partners note they are waiting on USDA to issue a "rapid test" kit to detect GMO material.
  • Futures are also being pressured by a pickup in the pace of winter wheat harvest.
  • Gulf SRW wheat basis is steady for immediate delivery to stand 45 cents over July futures.


Live cattle futures are called to open steady to weaker on deterioration in the boxed beef market.

  • Live cattle are expected to see followthrough from yesterday's losses as traders wait on cash cattle trade to develop.
  • Due to deterioration in Choice boxed beef values and a slightly larger showlist than last week, traders expect steady-at-best to $1 lower cash cattle trade with last week's $122 trade.
  • Choice beef values softened another $1.16 yesterday to stand at $200.63 per cwt., with Select up 6 cents. Movement was lackluster at 153 loads, but overall for the week it is solid.
  • Pressure on nearby live cattle should be limited by the discount those contracts hold to last week's cash market.
  • Feeder cattle futures are called steady to weaker on followthrough from yesterday's losses as well as traders working to narrow the sharp premium nearbys hold to the cash index.


Lean hog futures are called to open mixed amid end-of-the-week position squaring.

  • Lean hog futures are expected to be mixed but could favor a weaker tone as traders work to take some profits out of the market.
  • June lean hog futures expire at noon CT today and are trading at nearly a $3 premium to the cash index.
  • July lean hog futures will soon be the lead-month contract and are trading in line with the cash market.
  • The cash hog market is expected to be mostly steady, but some firmer undertones are possible as some packers are still in need of supplies for Saturday's kill.
  • Pork cutout values slipped 36 cents yesterday to push packer profit margins deeper into the red.
  • Following this week's sharp gains, lean hog futures are overbought and due for a time or price correction.
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