Ahead of the Open (VIP) -- November 8, 2013

November 8, 2013 02:08 AM
 

Corn futures are called narrowly mixed as traders wait on the sidelines for USDA data.

  • Corn futures didn't stray too far from unchanged overnight and ended the session narrowly mixed.
  • Traders are also working on evening positions ahead of this afternoon's USDA reports. Traders look for USDA to raise the size of the crop to around 14.022 billion bu. and for carryover to climb above 2 billion bushels.
  • Strength in the U.S. dollar index this morning, due to more jobs created in October than expected, will limit traders' willingness to do more than cover short positions.
  • But U.S. corn prices are still viewed as low enough to rebuild demand, especially after large purchases were made in October.
  • Gulf corn basis is steady to 1 cent lower for fall and winter delivery to reflect the arrival of new-crop supplies on the market.
  • Brazil's Conab has raised its estimate of the country's 2013-14 corn crop to a range of 78.5 MMT to 79.8 MMT, up from it's previous forecast of 78.4 MMT to 79.6 MMT.

Soybean futures are called 1 to 3 cents lower amid profit-taking.

  • Soybean futures were quiet overnight and ended the overnight session 1 to 3 cents lower.
  • Traders are also focused on evening positions ahead of this morning's crop reports.
  • Traders look for USDA to raise the size of the crop to around 3.225 billion bu. and for carryover to rise to 183 million bushels.
  • According to official customs data, China imported 4.19 MMT of soybeans last month, down 11% from the previous month. Year-to-date imports of 49.9 MMT are up 3.3% from year-ago.
  • Meanwhile, Conab has raised its Brazilian bean crop estimate to a record 87.9 MMT to 90.2 MMT. Last month the agency pegged the crop between 87.6 MMT and 89.7 MMT.
  • Gulf soybean basis is up 4 to 5 cents for nearby delivery to reflect an uptick in demand.

All wheat flavors are called mixed in pre-report position squaring.

  • All wheat flavors were choppy overnight, but favored a firmer tone at the end of the session. Nearbys ended mostly around 1 cent higher.
  • Traders are focused on evening positions ahead of this morning's USDA reports. Traders look for USDA to trim wheat carryover to around 527 million bu. due to higher demand expectations.
  • Buying is being limited by strength in the U.S. dollar index. This morning's monthly employment report showed 204,000 nonfarm payrolls were added in October, coming in above expectations.

Live cattle futures are called steady to weaker on pre-weekend position squaring.

  • Live cattle futures are expected to be weaker this morning as traders even positions ahead of the weekend and react to lower cash cattle trade.
  • Cash cattle trade got underway at $131 yesterday, $1 below the bulk of last week's trade.
  • Yesterday December live cattle finished at a slight premium to the cash market, which raises the risk of profit-taking to end the week.
  • Meanwhile, Choice beef values slipped 57 cents and Select declined 45 cents on lackluster movement of 149 loads.
  • Strength in the U.S. dollar index also raises concerns about export demand, especially after net sales reductions were reported in yesterday's weekly report.

Lean hog futures are called mixed as traders even positions ahead of the weekend.

  • Lean hog futures are expected to be mixed today as traders reevaluate positions.
  • Futures are working on sharp weekly losses and are due for a corrective bounce.
  • But building supplies will limit traders' willingness to rebuild long positions, especially with weights also rising.
  • Pork cutout values improved $1.05 yesterday on solid movement of 363.32 loads, which could encourage some short-covering.
  • But the cash hog market is expected to be steady to lower as packers have had no difficulty securing this week's needs.
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