Ahead of the Open (VIP) -- June 7, 2013

June 7, 2013 03:19 AM
 

The Labor Department reports that 175,000 non-farm jobs were added last month which was about as expected. The unemployment rate ticked up slightly to 7.6% as more people tried to re-enter the job market.

Corn futures are called 2 to 6 cents higher on followthrough from short-covering seen in overnight trade.

  • Corn futures were 1 to 7 cents higher in overnight trade on followthrough from yesterday's gains.
  • December corn is poised to post moderate losses this week as the contract is trading around a dime lower than last week's close.
  • Talk is picking up about producers' plans to either switch unplanted intended corn acres to soybeans or claim Prevent Plant.
  • There are also concerns about the crop that has been planted due to the impact recent cool and wet conditions have had on its establishment.
  • News that Tyson may need to import corn from South America in the near-term due to tight domestic supplies reminds the market of the razor-thin old-crop stocks situation.

 

Soybean futures are called to open 12 to 20 cents higher on improved technicals.

  • Soybean futures ended the overnight session 12 to 21 cents higher as improved technicals continue to encourage funds to extend their long exposure to the market.
  • November soybean futures are working on solid weekly gains. A high-range close would especially be a positive technical signal for traders heading into the weekend.
  • Concerns about soybean planting delays are beginning to grow, which is also supportive for new-crop futures.
  • Yesterday's NWS 6- to 10-day forecast calls for above-normal precip across the eastern Corn Belt, along with normal temps.

 

Wheat futures are called to open 1 to 3 cents higher on spillover from neighboring pits.

  • Chicago wheat ended the overnight session mostly 1 to 2 cents higher, Kansas City wheat was mixed amid bull spreading and Minneapolis wheat was 6 to 7 cents higher.
  • Wheat remains in a follower's role to neighboring pits and outside markets.
  • Early harvest-related activity in southern Texas is limiting buying, although harvesters report disappointing results.

 

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

  • Live cattle were mixed yesterday amid uncertainty surrounding this week's cash trade, with more of the same expected this morning.
  • While packers' profit margins remain well in the black, they haven't been willing to raise bids due to uncertainty surrounding beef demand.
  • As a result, cash cattle trade isn't expected until later today at steady to $1 lower levels compared to last week's $124 trade.
  • Choice boxed beef values were 77 cents softer yesterday and Select rose 28 cents on decent movement of 187 loads.
  • Strength in the corn market will make it more difficult for feeder futures to generate much more than short-covering support.

 

Lean hog futures are called to open mixed following yesterday's gains.

  • Weakness in the pork cutout market yesterday is expected to result in some profit-taking following yesterday's gains, although tighter market-ready supplies will limit selling.
  • Pork cutout values slipped $1.20 and movement softened to 361.9 loads of cuts. A sharp drop in belly prices led to much of the decline.
  • The cash hog market is called mixed amid varied demand for cash hogs.
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