Ahead of the Open (VIP) -- November 14, 2013

November 14, 2013 02:16 AM

Corn futures are called narrowly mixed on a continuation of choppy overnight trade.

  • Corn futures ended the overnight session narrowly mixed and didn't stray too far from unchanged due to a lack of fresh news.
  • Traders have to wait until tomorrow morning for the weekly export sales report due to Monday's federal holiday.
  • Improvement in Gulf basis this week suggests demand remains strong. Gulf basis is steady to 4 cents firmer again this morning to stand 82 cents above December futures for immediate delivery.
  • December corn spent the overnight session pivoting around $4.30. The contract needs to remain above this level to avoid triggering sell stops. The contract needs closes above $4.40 to provide more evidence a harvest low has been posted.


Soybean futures are called 3 to 5 cents lower amid spread unwinding.

  • Soybean futures ended the overnight session 4 to 6 cents lower in all but the front-month contract, which ended marginally higher.
  • Given a lack of fresh news, traders are focused on unwinding long soybean/short corn spreads.
  • Traders have to wait until tomorrow for the weekly export sales report due to Monday's holiday.
  • A choppy tone in outside markets is also limiting fresh buying in the soybean pit. The U.S. dollar index is slightly firmer this morning, with crude oil lower and gold higher.
  • USDA announced India purchased 40,000 MT of soybean oil for 2013-14.
  • Gulf soybean basis is steady to 2 cents higher this morning after softening for much of this week.


Wheat futures are called 3 to 6 cents higher amid demand improvements.

  • All wheat flavors firmed during the overnight session, with SRW up 4 to 7 cents, HRW up 3 to 5 cents and HRS mostly around 3 cents higher.
  • A flurry of export business helped to support wheat futures overnight. Japan included U.S. wheat in its recent purchase, with Brazil and South Korea also bought U.S. wheat.
  • Traders are awaiting results of the Egyptian wheat tender, with the U.S. as a possible supplier.
  • Meanwhile, favorable winter wheat conditions have limited buying so far this week.
  • Looking further down the road, Strategie Grains looks for EU soft wheat area to rise for the 2014-15 crop year due to profitable margins.
  • Wheat futures have a lot of work ahead in order to signal near-term lows have been posted.


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

  • Live cattle futures are expected to be mixed as traders wait on cash trade to begin.
  • Nearby futures posted a high-range close yesterday, which give bulls the advantage this morning.
  • Expectations are for steady-at-best cash cattle trade either today or tomorrow given a slightly larger showlist, but packers could be forced to pay up for supplies due to a pickup in beef movement.
  • Choice beef values firmed 75 cents yesterday and 187 loads changed hands.
  • Feeder futures are also expected to be mixed due to a choppy tone in the corn market. Nearby feeder futures are trading in line with the cash index.


Lean hog futures are called steady to weaker on building supplies.

  • Lean hog futures are expected to build on yesterday's weaker close due to building market-ready supplies.
  • And not only are there more hogs available for the market, but also weights continue to rise, adding even more pork to the market.
  • But demand for cash hogs remains solid due to impressive pork movement. Pork cutout values slipped $1.50 yesterday, but more than 545 loads changed hands.
  • The cash market is expected to have a negative bias, but packers' profit margins are well in the black.
  • December lean hog futures are trading at around a $1 premium to the cash index.
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