Ahead of the Open (VIP) -- November 4, 2013

November 4, 2013 02:18 AM
 

Corn futures are called to open marginally to 1 cent lower in lackluster trade.

  • Corn futures ended the overnight session mostly around a penny lower in lackluster trade.
  • Traders will turn their focus to evening positions ahead of Friday's USDA reports.
  • Ahead of the report, private estimates will continue to be released this week. Friday afternoon brokerage firm INTL FC Stone raised its corn crop estimate to 14.367 billion bu., with a yield of 161.2 bu. per acre. Last month the firm pegged the corn crop at 14.150 billion bushels.
  • Corn futures were unable to gain upward traction last week despite news of stronger-than-expected demand during October as traders' focus remains on reports of better than expected yields.
  • Gulf corn basis is steady to a penny higher this morning.

 

Soybean futures are called 4 to 7 cents higher amid short-covering.

  • Soybean futures ended the overnight session 5 to 7 cents higher on short-covering, with November steady.
  • Traders have returned to the market as light buyers to start the week on ideas last week's losses were overdone.
  • Traders will be focused on evening positions ahead of Friday's USDA reports.
  • INTL FC Stone has raised its soybean crop forecast to 3.27 billion bu. with a yield of 42.8 bu. per acre. Last month the brokerage firm pegged the crop at 3.163 billion bushels.
  • Gulf soybean basis is 2 to 5 cents lower this morning, which reflects the arrival of new-crop supplies to the market.

 

Wheat futures are called 1 to 2 cents higher on dollar weakness.

  • All wheat flavors are mostly 1 to 2 cents higher this morning on help from slight dollar weakness.
  • Buying in the wheat pit is being limited by forecasts for rains across the HRW Wheat Belt this week.
  • Traders are also focused on evening positions ahead of Friday's USDA reports. Traders' last look at the balance sheets was in September due to the government closure the first half of October.
  • Gulf SRW wheat basis is steady this morning to signal supply and demand are in balance.

 

Live cattle futures are called to open mixed as traders gauge cash expectations.

  • Live cattle futures are expected to be mixed as nearby futures are trading in line with last week's cash trade.
  • Cash cattle traded at mostly $132 in the Plains late Friday, which is steady with the previous week. Given a slightly larger showlist, steady trade is encouraging, although traders expected packers would be forced to raise bids due to strength in the beef market.
  • Choice beef values weakened 57 cents on Friday and Select declined 94 cents, but values were higher for the week.
  • With Choice beef values above $200, traders are taking a cautious approach to the market as demand has softened.

 

Lean hog futures are called mixed amid position squaring.

  • Key to start the week will be if futures see followthrough from last week's topping signs or if traders return as value buyers.
  • Lean hog futures posted sharp losses last week, with December hogs hovering above important uptrending support.
  • A downside bias is likely as the cash market is called steady to weaker amid rising market-ready supplies.
  • But with profit margins in the black, packers want to keep kill lines running as full as possible.
  • Pork cutout values slipped 43 cents on Friday on slowed movement of 257.57 loads.
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