Ahead of the Open (VIP) -- June 6, 2013

June 6, 2013 03:16 AM
 

Corn futures are expected to be mixed after a choppy overnight tone.

  • Corn futures ended the overnight session 1 cent lower to 2 cents higher.
  • Weakness in the dollar index is limiting selling in the commodity complex this morning.
  • This morning's Weekly Export Sales Report didn't provide any bullish news as it showed sales of 107,200 MT for 2012-13 and 51,600 MT for 2013-14, which was well below expectations.
  • Gulf corn basis has softened by 3 cents for immediate delivery to reflect softer demand.
  • With more rain in the near-term forecast, producers aren't making strong headway on planting remaining corn acres. But traders say this is factored into prices.

 

Soybean futures are expected to favor a weaker tone in mixed trade this morning.

  • Soybeans ended 1 to 5 cents lower through the January 2014 contract, with far deferreds steady to firmer.
  • Weakness in the dollar helped to limit selling, but expectations some corn acres will be switched to soybeans helped to limit pressure to profit-taking in new-crop futures.
  • The latest NWS 6- to 10-day forecast signals better planting conditions are ahead for especially the central and western Corn Belt to aid in soybean planting.
  • This morning's weekly export sales data showed soybean sales of 48,400 MT for 2012-13 and 589,900 MT for 2013-14, which met expectations.
  • Gulf soybean basis has softened by 5 cents for immediate delivery, reflecting softer demand.

 

Wheat futures are called mixed due to spillover from corn and soybeans.

  • Chicago wheat futures ended the overnight session marginally to 2 cents lower, while Kansas City futures were mixed and Minneapolis was mostly 2 cents higher.
  • Weakness in the dollar index is helping to limit selling to profit-taking.
  • This morning's Weekly Export Sales Report showed net wheat sales reductions of 33,200 MT for 2012-13, which were offset by sales of 664,900 MT for 2013-14 for a tally that was just above expectations.
  • South Korea is expected to receive its first cargo of U.S. wheat since the controversy over GMO material on an Oregon farm was discovered.

 

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

  • Following yesterday's losses, live cattle futures are expected to be mixed as traders wait on cash cattle trade to begin.
  • June live cattle are trading at around a $4 discount to last week's cash cattle trade and after futures faced pressure yesterday, expectations are for $1 lower cash trade at around $123.
  • While packers' profit margins remain well in the black, weakness in the boxed beef market this week gives packers the upper hand.
  • Choice beef values softened 89 cents yesterday and Select rose 47 cents and movement was solid at 224 loads.
  • A mixed tone in the corn market this morning will limit buying in feeder futures as traders are concerned about rising feed costs due to delayed corn planting.

 

Lean hog futures are called to open mixed on bull spreading.

  • June lean hog futures were firmer yesterday while the rest of the market was weaker. Bull spreading is expected again this morning due to tightening market-ready supplies.
  • The cash hog market is expected to be mixed this morning due to varied demand. While packers' profit margins are in the red, some locations are in need of supplies for late-week kills.
  • Pork cutout values firmed 84 cents yesterday on strength in the belly market. Pork movement of 422.9 loads signals a pickup in demand.
  • June lean hog futures are trading at a slight premium to the cash index, which will limit buying given mixed demand for cash hogs.
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