Ahead of the Open (VIP) -- November 25, 2013

November 25, 2013 02:14 AM

Corn futures are called steady to a penny higher amid pre-holiday position evening.

  • Corn futures ended the overnight session steady to fractionally higher amid limited trading interest.
  • Strength in the U.S. dollar index is limiting buying interest, as is a record-large 2013 corn crop.
  • On the other hand, recent signs that prices are rebuilding demand is helping to keep selling interest in check.
  • News the head of China's Development and Research Centre says the country could lower its long-term corn self-sufficiency target is more of a long-term market factor, and thus is expected to have limited influence on the charts today.
  • While the corn market has trended mildly higher over the past week, the overall chart pattern still favors market bears.


Soybean futures are called 4 to 8 cents lower this morning.

  • Soybean futures ended the overnight session roughly 5 to 8 cents lower as strength in the U.S. dollar index encouraged profit-taking.
  • Traders are also taking advantage of last week's late-week rally, which pushed nearby contracts back above the key $13.00 level. The March contract is testing that level of support.
  • Gulf soybean basis is steady this morning, signaling freshly harvested beans are sating strong demand.
  • China has started its soybean stockpiling efforts aimed at lifting domestic prices. This should help keep demand for cheaper U.S. bean supplies high.
  • Traders will receive an update on the demand front in this morning's weekly export inspections report.
  • USDA this morning announced a 120,000 MT soybean sale to unknown destinations for 2014-15 delivery.


Wheat futures are called 2 to 4 cents higher this morning.

  • Uncertainty about what impact a blast of cold weather and even some snow on the Southern Plains last week will have on the winter wheat crop lifted wheat overnight.
  • USDA will provide an update on the condition of the crop this afternoon.
  • But gains are being limited by strength in the U.S. dollar index.
  • Light support also stems from reports from SovEcon that Russian wheat prices are too high on the global market.
  • News Iraq bought 120,000 MT of Canadian wheat and 50,000 MT of Australian wheat reminds that the U.S. is facing stiff export competition.


Live cattle futures are expected to get off to a choppy start after a neutral Cattle on Feed Report.

  • Friday's Cattle on Feed Report came in about as expected, with On Feed at 94% of year ago-levels, Placements at 110% and Marketings at 101% of year-ago.
  • Frozen beef stocks at the end of October also came in a bit lighter than expected.
  • The market could find some support from strength in the boxed beef market Friday. Choice cuts firmed 34 cents, Select rose 39 cents and movement was strong at 207 loads.
  • But on the other hand, upside potential will be limited as futures are already trading at a slight premium with the upper end of last week's $130 to $131 cash cattle trade on the Southern Plains.


Lean hog futures are called mixed on position squaring.

  • Position evening is expected in the lean hog market today. Strength in the U.S. dollar index could give bears an edge.
  • Hog supplies are on the rise, which is expected to weigh on the cash hog market again today.
  • Friday's Cold Storage Report came in about as expected with frozen pork stocks as of Oct. 31 totaling 566.7 million lbs., which was 1.6 million lbs. above the average guess and 36.8 million lbs. below year-ago.
  • The pork cutout value rose 16 cents Friday, but this slowed movement to 300.3 loads.
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