Ahead of the Open (VIP) -- November 22, 2013

November 22, 2013 02:16 AM

Corn futures are called steady to 1 cent higher amid light short-covering.

  • Corn futures ended the overnight session steady to 1/2 cent higher in light buying.
  • Weakness in the U.S. dollar index is helping to limit pressure from spreading with soybeans, which are stronger.
  • Traders have been given a string of very strong weekly export sales reports and are still not convinced about demand strength. The bottom line is traders are concerned that if prices rise too far too fast, demand will soften.
  • Gulf corn basis is 1 to 2 cents softer for delivery the remainder of 2013. This could be a sign of softening demand, but it is more likely a reflection of increasing available supplies.


Soybean futures are called 5 to 10 cents higher amid strong demand.

  • Soybean futures ended the overnight session 3 to 11 cents higher, with nearbys leading gains.
  • Futures extended gains in late overnight trade amid spreading with corn, as well as continued strong demand.
  • Traders are reacting to news China's Ministry of Commerce has raised its soybean import forecast for November by 220,000 MT to 6.17 MMT. But it sees December imports falling to 3.85 MMT.
  • Also this morning USDA announced China purchased 115,000 MT of soybeans for 2013-14.
  • January beans returned above the key $13.00 level overnight.
  • Gulf soybean basis is steady this morning to stand 91 cents over January futures for immediate delivery.


SRW and HRW are called steady to 2 cents higher, with HRS expected to be mixed.

  • SRW and HRS wheat futures ended the overnight session mostly around 2 cents higher, with HRS favoring a firmer tone in narrowly mixed trade.
  • Sharp weakness on the U.S. dollar index this morning is providing light support in wheat futures this morning.
  • The dollar is weaker against the euro, which is being bolstered by some positive economic data out of Germany.
  • Futures are also being supported by concerns about late-season crop problems in Western Australia. Quality concerns are raising expectations importers will turn to the U.S. and Canada to meet needs.
  • Gulf SRW wheat basis is 5 to 10 cents higher for delivery the remainder of the year. Basis for immediate delivery stands $1.00 over December futures.


Live cattle futures are called mixed as traders even positions ahead of the Cattle on Feed Report.

  • Live cattle futures are expected to be mixed today as traders even positions ahead of key USDA data.
  • Traders factored in $131 cash cattle trade yesterday, which began in the Southern Plains. December futures are trading at a slight premium to this $1 lower cash trade compared to last week.
  • With cash trade known, traders' focus will be on evening positions ahead of this afternoon's Cattle on Feed Report. The report is expected to show On Feed at 94.2%, Placements at 110% and Marketings at 101.5% of year-ago levels.
  • Traders are also preparing for the Cold Storage Report which is expected to show frozen beef stocks at the end of October up 1% from the previous month.
  • Buying will be limited by ongoing weakness in the beef market, as Choice values slipped 76 cents yesterday and Select declined 87 cents. Movement, however, improved to 217 loads.


Lean hog futures are called mixed on position squaring.

  • Lean hog futures are expected to be choppy this morning as traders even positions ahead of the weekend. Many traders will take an extended break from the market given next week is Thanksgiving.
  • Buying in the hog pit will be limited by building supplies, but continued strong pork movement has helped to ease the supply burden.
  • Pork values firmed 6 cents after dropping sharply this week. Movement remained strong at more than 400 loads.
  • The cash hog market is called mostly steady, but a weaker undertone is likely to linger into next week as packers are having no difficulty securing supplies.
  • Traders are also readying for this afternoon's Cold Storage Report, which is expected to show frozen pork stocks at the end of October down slightly from the previous month.
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