Ahead of the Open (VIP) -- November 15, 2013

November 15, 2013 02:13 AM
 

Corn futures are called steady to 1 cent higher in lackluster trade.

  • Corn futures ended the overnight session marginally to a penny higher, but are working on losses for the week.
  • Funds hold a record net short position and until that is lifted, upside potential will be limited.
  • Weekly corn sales of 1,202,900 MT for 2013-14 came in above expectations, with Mexico the lead buyer, followed by Japan.
  • But strong sales did little more than limit selling in late overnight trade.
  • Gulf corn basis is steady to 1 cent firmer again this morning to reflect still-strong demand. Basis for immediate delivery is 85 cents over December futures.

 

Soybean futures are called 4 to 8 cents lower amid spread unwinding with corn.

  • Soybean futures ended the overnight session mostly 4 to 8 cents lower.
  • Back-and-forth price action this week has come compliments of spreading and spread unwinding with corn.
  • January beans have spent the week trading around the $13.00 level. A weekly close above that level would be a positive technical sign.
  • This morning's weekly export sales data showed soybean sales of 848,500 MT for 2013-14 and 60,600 MT for 2014-15, which came in at the low end of expectations.
  • Gulf soybean basis is steady to 4 cents firmer for nearby delivery to stand 97 cents over January futures for November delivery.

 

Wheat futures favored a firmer tone overnight, but softened in late trade. Futures are called mixed.

  • All wheat flavors favored a firmer tone overnight on spillover from corn, but softened in late trade to end mixed.
  • HRS futures are hovering above key support levels, which if violated would open significant near-term downside risk for the market.
  • This morning's weekly export sales data showed wheat sales of 287,800 MT for 2013-14 and 900 MT for 2014-15, which fell short of expectations and reminds traders of increased global competition.
  • But there have been an increase in daily sales announcements from private sources this week, which suggests next week's sales report should reflect an uptick in demand due to lower prices.

 

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

  • Live cattle futures are expected to be choppy this morning as traders wait on cash cattle trade to begin.
  • Based on this week's gains in live cattle futures, traders anticipate $1 to $2 higher cash trade to begin later today.
  • But packers so far are hesitant to raise bids due to a slight increase in this week's showlist, which means higher cash trade is not a sure thing.
  • Choice beef values softened 45 cents and Select rose 3 cents on 170 loads changing hands yesterday.
  • Nearby feeder futures are trading in line with the cash index, which is down 25 cents to $165.25.

 

Lean hog futures are called steady to firmer on ideas this week's losses are overdone.

  • Lean hog futures have posted sharp losses this week, which is expected to result in some short-covering this morning.
  • But this week's sharp price slide has resulted in technical chart deterioration, which gives bulls less confidence moving forward.
  • Pork cutout values firmed 57 cents yesterday on strong movement of 465.83 loads.
  • While this week's surge in pork movement has helped to offset rising market-ready supplies, packers still have little reason to raise bids amid plentiful supplies.
  • As a result, the cash market is called steady to weaker again today.
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