Ahead of the Open (VIP) -- November 6, 2013

November 6, 2013 02:17 AM
 

Corn futures are expected to be mixed this morning in lackluster trade.

  • Corn futures ended the overnight session steady to marginally lower after seeing another lackluster overnight trading session.
  • Weakness in the U.S. dollar index helped to limit pressure, but reports of better-than-expected yields continue to weigh on futures.
  • As a result, traders look for USDA to raise its corn yield estimate in Friday's crop report.
  • Gulf corn basis is steady to 1 cent lower to reflect the arrival of new-crop supplies.

 

Soybean futures are called 4 to 6 cents higher on short-covering.

  • Following yesterday's losses, short-covering lifted soybean futures overnight. Soybeans ended the overnight session around 5 cents higher.
  • Back-and-forth price action is likely to continue this week as traders focus on evening positions ahead of Friday's key crop reports.
  • Traders look for USDA to raise its soybean yield estimate due to reports of better-than-expected yields throughout harvest.
  • But continued strong demand will help to keep carryover tight, which is also contributing to short-covering this morning.
  • Reflecting strong demand is a penny gain in Gulf soybean basis for immediate delivery.

 

SRW and HRS are called firmer, with HRW expected to be mixed this morning.

  • SRW wheat ended the overnight session marginally to 2 cents higher, with HRS posting marginal gains. HRW wheat ended the overnight session mixed.
  • Weakness in the U.S. dollar index is supportive, especially with a wave of tenders posted overnight.
  • Traders are waiting on results of an Egyptian wheat tender. Key will be if the U.S. gets any of the business, as it would signal prices here are competitive.
  • Upside potential for HRW wheat is being limited by improved crop condition ratings.

 

Live cattle futures are expected to favor a firmer tone in mixed trade.

  • Live cattle futures favored a firmer tone yesterday amid tightening supplies and closed mostly higher. A mixed start is expected today as traders wait on cash trade to develop.
  • This week's showlist is larger across the Plains, but traders expect at least steady cash trade with last week given the overall tightness of supplies.
  • Choice beef values slipped just 11 cents yesterday and Select rose 55 cents on lackluster movement of 122 loads.
  • Nearby live cattle are trading in line with last week's cash trade.
  • Also supportive this morning is news that Russia will lift its ban on U.S. beef over the ractopamine dispute at the beginning of next year.
  • November feeder futures are trading in line with the cash index, which will limit buying.

 

Lean hog futures are called steady to weaker on cash market concerns.

  • Lean hog futures are expected to see profit-taking to start the day.
  • Pork cutout values slipped $1.08 yesterday, led by declines in hams. Movement of 315.17 is solid, but the decline in values comes as market-ready supplies are increasing.
  • While packers' profit margins remain well in the black, cash bids are expected to be steady to weaker. Packers are having no difficulty securing needed supplies this week.
  • December hogs are trading in line with the cash index, but the February contract holds a lofty premium to it.
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