Ahead of the Open (VIP) -- October 10, 2013

October 10, 2013 03:14 AM

Corn futures are called to open steady to 1 cent higher in lackluster trade.

  • Corn futures were firmer throughout the overnight session and ended mostly around a penny higher in lackluster trade.
  • Back-and-forth price action has kept prices from moving too far from unchanged this week. Futures are consolidating above the October low.
  • Strategie Grains has lowered its 2013-14 EU corn crop forecast by 900,000 MT to 64.9 MMT.
  • Due to the government shutdown, the weekly export sales data will not be released today. But traders expect last week's business to have brought sales between 600,000 MT and 1.4 MMT.
  • Meanwhile, harvest activity is limiting buying, although rain-related delays are anticipated this weekend.


Soybean futures are called 5 to 7 cents higher on short-covering.

  • Soybean futures ended the overnight session 3 to 7 cents higher in corrective trade following yesterday's choppy price action.
  • Upside potential was limited overnight by stepped up harvest progress, although rain delays this weekend are expected to push producers back out of fields.
  • Meanwhile, there is talk that foreign buyers are flying under the radar and booking U.S. soybeans while the U.S. government is shut down.
  • If the weekly export sales data would have been released this morning (government shutdown), traders believe it would reflect business last week between 400,000 and 1.025 MMT.


Wheat futures are called 2 to 3 cents higher on global crop concerns.

  • All wheat flavors ended the overnight session mostly 2 to 3 cents higher and near session highs, which gives bulls more momentum heading into daytime trade.
  • Traders are waiting on results from the Egyptian wheat tender of at least 50,000 MT.
  • Recent sharp weakness in the U.S. dollar index has helped to boost the U.S.'s competitiveness on the global market. But the dollar is seeing light followthrough buying this morning after posting sharp corrective gains yesterday.
  • Strategie Grains has lowered its 2013-14 EU wheat crop forecast by 300,000 MT to 135.2 MMT.
  • While the weekly export sales data will not be released because of the government shutdown, traders estimate between 300,000 MT and 900,000 MT of sales were added to the books last week.


Live cattle futures are called to open mixed as traders wait on cash cattle signals.

  • Nearby live cattle futures came off session lows yesterday, but the weaker close gives bears more momentum heading into this morning's open.
  • But a choppy day of trade is likely ahead as traders wait on cash cattle trade to begin.
  • This week's tighter showlist gives feedlots more bargaining power, but bids and asking prices are several dollars apart to signal late-week trade is likely.
  • Nearby futures are trading at a premium to last week's mostly steady cash cattle trade.
  • Traders are hesitant to extend positions aggressively due to the lack of information caused by the government shutdown.


Lean hog futures are called to open weaker on followthrough pressure.

  • Following yesterday's losses, lean hog futures are vulnerable to followthrough pressure as the market is signaling a high has been posted.
  • Liquidation pressure in October hogs spilled over to other contracts yesterday as traders are exiting positions ahead of next week's uncertain settlement process.
  • The cash hog market is expected to be mostly steady today, but mixed bids are likely due to varied demand.
  • Many packers have ramped up their Saturday kill requirements as numbers are starting to build. But most say they won't need to raise bids as they are having no difficulty securing needed supplies.
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