Ahead of the Open (VIP) -- November 13, 2013

November 13, 2013 02:16 AM

Corn futures are called 1 to 2 cents higher as funds cover short positions.

  • Corn futures ended the overnight session mostly around a penny higher in light trade.
  • Price action was limited overnight, with funds lightly covering short positions at times after yesterday's losses.
  • USDA reports as of Sunday that 84% of the crop was harvested, which is ahead of the five-year average of 79% complete.
  • With harvest winding down, more focus is turning to demand.
  • FranceAgriMer has trimmed its corn production estimate from 15.38 MMT to 15.15 MMT. But FranceAgriMer raised its 2013-14 corn ending stocks estimate from 2.7 MMT to 2.95 MMT, citing increased competition from Ukraine.
  • Meanwhile, Gulf corn basis is 5 cents higher for immediate delivery, reflecting a pickup in demand.


Soybean futures are called 3 to 6 cents lower on position squaring.

  • Soybean futures ended the overnight session 3 to 7 cents lower as funds returned to take some profits out of the market following yesterday's gains.
  • Following back-to-back days of price gains this week, soybean futures are vulnerable to profit-taking.
  • Support for January beans is at the $13.00 level, a price the contract has closed above so far this week.
  • USDA reports soybean harvest as of Sunday was 91% complete, one percentage point behind the five-year average.
  • USDA announced China bought 123,000 MT of soybeans for 2013-14 delivery.
  • The availability of new-crop supplies to the market has weakened basis levels, although continued strong demand should eventually firm basis.
  • Gulf soybean basis is 4 to 5 cents lower for delivery the remainder of this year.


Wheat futures are expected to be mostly 1 to 2 cents higher on the open on spillover from corn.

  • All wheat flavors firmed at the end of the overnight session, but some scattered selling was seen in deferred contracts. Nearby contracts ended the overnight session mostly around 1 to 2 cents higher.
  • Our weighted Crop Condition Index (0 to 500 point scale) shows the HRW crop improved 5 points to 369, while the SRW crop firmed 2 point to 380.
  • The China National Grain and Oils Information Center says the country will import 8 MMT of wheat in 2013-14 -- the highest in nearly 20 years.
  • An Australian grain firm, CBH Group, has raised its estimate of the country's 2013-14 wheat crop by 100,000 MT to 26 MMT.
  • Also, FranceAgriMer has raised its 2013-14 soft wheat production crop peg by 1.32 MMT to 36.94 MMT. But the agency left its export forecast unchanged at 11.2 MMT.


Live cattle futures are called steady to weaker on softening cash expectations.

  • Live cattle futures are called to open steady to weaker on expectations for steady to weaker cash cattle bids this week.
  • A slightly higher showlist tally, softening beef values and packers' negative profit margins has traders expecting weaker cash cattle bids later this week.
  • Choice beef values slipped 53 cents and Select declined $1.20 yesterday. But the good news is lower prices are boosting movement; 267 loads changed hands.
  • November feeder cattle futures are trading at around a dollar discount to the cash index, which should limit pressure on nearby feeder futures this morning.


Lean hog futures are called steady to weaker on followthrough pressure.

  • Lean hog futures are expected to build on yesterday's losses in early trade.
  • The cash hog market is expected to be steady to weaker this morning amid ample supplies, but packer demand for hogs is also strong given profitable margins.
  • Pork cutout values slipped 51 cents yesterday, but packers are still enjoying margins in the double digits.
  • Also impressive is the pickup in pork demand, as 679.76 loads changed hands yesterday.
  • December lean hog futures are trading at around a $2 premium to the cash index, which increases the risk of profit-taking this morning.
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