Ahead of the Open (VIP) -- November 11, 2013

November 11, 2013 02:12 AM
 

Corn futures are called 3 to 4 cents higher on short-covering.

  • Corn futures ended the overnight session 3 to 4 cents higher on followthrough from Friday's gains.
  • A high-range close today would signal the market is working on posting lows, although much more technical chart improvement is needed to confirm lows.
  • Traders still have Friday's USDA reports on their minds, in which the agency raised the size of the corn crop less than traders expected.
  • Traders are also noting the recent uptick in demand as supportive, as it signals prices are a value.
  • But Gulf corn basis is steady for nearby delivery this morning to signal supplies are aligned with demand.
  • Meanwhile, Ukraine says it will be able to deliver 2 MMT of corn to China before the end of the year as part of a loan agreement between the countries, despite a delayed grain harvest.

 

Soybean futures are called 4 to 8 cents lower on profit-taking.

  • Following Friday's sharp gains, soybean futures ended the overnight session 5 to 8 cents lower on light profit-taking.
  • But traders still have Friday's USDA reports on their minds, which limited pressure overnight.
  • USDA raised the size of the U.S. crop by less than traders expected, with carryover also rising more modestly than expected.
  • Traders are also noting China's large appetite for U.S. beans, although many believe if prices rise too far too fast demand will wane.
  • Gulf soybean basis is 3 cents weaker for nearby delivery to reflect the availability of new-crop supplies to exporters.

 

Wheat futures are expected to favor a firmer tone on spillover from corn.

  • SRW wheat ended the overnight session mostly 1 to 2 cents higher, with HRW and HRS favoring a firmer tone in mixed trade.
  • Wheat is benefiting from spillover from the corn market, as well as commercial buying.
  • A weaker U.S. dollar index is also supportive for wheat futures this morning, although the index strengthened considerably last week.
  • Gulf SRW wheat basis is steady for immediate delivery this morning to suggest supplies and demand are balanced.
  • USDA will not release crop progress or condition data today due to the federal holiday.

 

Live cattle futures are expected to be mixed as traders await cash signals.

  • Nearby live cattle ended last week slightly higher and futures are expected to be mixed on a combination of followthrough buying and profit-taking.
  • This week's showlist is expected to be up slightly after some feedlots didn't get showlists cleaned up.
  • But the premium nearby futures hold to last week's $131 to $132 cash trade signals bullish attitudes prevail.
  • On Friday, Choice beef cuts softened by $1.20 and Select declined 43 cents on light movement of 108 loads.

 

Lean hog futures are called mixed in lackluster trade.

  • Most lean hog contracts ended last week with slight gains despite a softer tone in the cash market. Futures are expected to be mixed this morning as traders reevaluate positions.
  • Even though hog supplies are building and weights are on the rise, demand for cash hogs remains strong due to profitable margins. This is helping limit pressure on the cash market.
  • Expectations are for steady to weaker bids this morning as packers say they already have early week supplies secure.
  • Pork cutout values firmed 43 cents on solid movement of 352.66 loads on Friday.
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