Ahead of the Open (VIP) -- May 10, 2013

May 10, 2013 03:18 AM

Corn futures are called to open 1 to 5 cents lower on profit-taking following yesterday's gains.

  • Corn futures ended the overnight session 2 to 4 cents lower following yesterday's gains. Some new-crop contracts posted bullish reversals yesterday.
  • Focus in the market will be on evening positions ahead of the first official look at USDA's 2013-14 balance sheets. Traders look for stocks to rebuild to around 1.973 billion bushels.
  • Meanwhile, very little revision is expected to 2012-13 carryover from last month's 757 million bu. projection.
  • Gulf corn basis is 2 cents higher this morning for immediate delivery to stand 48 cents above May futures to signal tight supplies or some improvement in demand.


Soybean futures are called mixed on bull spreading.

  • Old-crop soybean futures ended the overnight session 1 to 3 cents higher, with new-crop futures 2 to 3 cents lower amid bull spreading.
  • Traders are busy evening positions and anticipating USDA's first official look at the 2013-14 balance sheets. Traders expect carryover to be pegged at around 239 million bushels.
  • Traders look for only fine-tuning to last month's 125-million-bu. 2012-13 carryover projection.
  • Negative outside markets are limiting buying in the commodity sector this morning, as the dollar index is stronger. Crude oil and gold futures are sharply lower this morning.


Wheat futures are called to open 3 to 5 cents lower on negative outside markets.

  • Chicago wheat futures ended the overnight session 4 to 10 cents lower, with Kansas City down 4 to 7 cents. Minneapolis was 3 to 5 cents lower at the end of overnight trade.
  • Focus during early daytime trade will be on evening positions ahead of the 11:00 a.m. CT USDA reports. Traders look for the first winter wheat crop peg of the year to come in at 1.477 billion bushels.
  • Meanwhile, traders look for USDA's first official look at the 2013-14 balance sheets to yield a carryover peg of around 627 million bushels.
  • Traders look for USDA to keep 2012-13 carryover unchanged from last month at 731 million bushels.


Live cattle futures are called to open steady to firmer on rising beef prices.

  • Live cattle futures are expected to build on yesterday's firmer close.
  • Much of today's strength is expected from continued gains in boxed beef prices. Choice values rose 82 cents yesterday to a new high of $205.49.
  • But news that McDonald's is phasing out one-third pound Angus burgers from its U.S. menus due to high beef prices keeps demand concerns on traders' minds.
  • The $2 drop in cash cattle prices this week also signals packers are concerned about beef demand.


Lean hog futures are called to open mixed with a downside bias on followthrough from yesterday's losses versus short-covering.

  • Lean hog futures are expected to see followthrough from yesterday's losses, although some short-covering is possible as traders even positions ahead of the weekend.
  • Traders keeping a close eye on the pork cutout market are encouraged by yesterday's $1.35 improvement, as it lifts packers' profit margins.
  • Pork movement of 357.8 loads yesterday, however, was not overly strong.
  • China has announced it will stockpile pork in state reserves in hopes of stabilizing domestic prices. This raises expectations of stepped up imports.
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