Ahead of the Open (VIP) -- October 11, 2013

October 11, 2013 03:24 AM

Corn futures are called to open 2 to 5 cents lower on followthrough pressure.

  • Corn futures ended the overnight session mostly 3 to 4 cents lower on followthrough from yesterday's low-range close.
  • December corn posted a new-for-the-move low overnight at $4.33. A low-range weekly close would give bears clear momentum heading into next week.
  • News circulating around the market that EPA is proposing a reduction from 2013 levels for corn ethanol in 2014 as part of the Renewable Fuels Standard added pressure.
  • There is also disappointment that USDA will not release its October Crop Production and Supply & Demand Report this morning due to the government shutdown.
  • Trader expectations were for a slight reduction in the size of the crop.


Soybean futures are called 2 to 6 cents lower amid profit-taking.

  • Soybean futures ended the overnight session mostly 3 to 6 cents lower in the nearby contracts, with far deferreds narrowly mixed.
  • Soybeans are seeing followthrough after futures posted a low-range close yesterday.
  • Traders are disappointed that USDA will not release its October crop reports.
  • Traders expected the report to show a slight uptick in the size of the soybean crop from last month.
  • Traders believe strong harvest progress was made this week, but weekend rains are expected to push farmers back out of the fields.
  • How the soybean market ends the week could be telling as to next week's direction. Futures are currently working on slight to moderate losses for the week.


Wheat futures are called mixed amid position squaring.

  • All wheat flavors ended the overnight session mixed, with pressure limited to position squaring.
  • Wheat futures have marked time in a consolidation range this week, which is somewhat impressive given the lack of fresh news to the market due to the government shutdown.
  • Traders have turned their focus to international happenings this week, which have featured concerns about the crop in the Black Sea region.
  • Overnight news surfaced that some private firms have trimmed their Russian crop estimates, which raises expectations that U.S. will garner a larger share of global wheat business in the year ahead.
  • But traders remain cautious about adding to long positions after Egypt cancelled its wheat tender yesterday because of high prices.


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

  • Choppy price action is possible as traders wait on cash cattle trade to begin, but concerns about the export market are expected to result in a weaker start to the day.
  • According to a notice issued by USDA's Food Safety and Inspection Service, the Cactus, Texas, Swift Beef Co. plant is not eligible to ship beef to South Korea.
  • Earlier this week, South Korea halted beef imports from a Colorado Swift Beef plant because of traces of Zilmax.
  • Meanwhile, this week's tighter showlist gives feedlots more bargaining power, but so far packers have been reluctant to raise bids due to poor margins.
  • Traders are also calculating the near-term and longer-term impacts of the death loss across the Northern Plains due to the recent snowstorm.
  • Traders are hesitant to extend positions aggressively due to the lack of information caused by the government shutdown. Data from Urner Berry reflects a slight increase in Choice beef values yesterday.


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

  • Following yesterday's slight gains lean hog futures are called mixed as traders even positions ahead of the weekend.
  • The lack of USDA data for the market has traders hesitant to add to positions. October lean hogs are working sharp weekly losses due to the uncertain settlement process.
  • Data from Urner Berry signals pork cutout values were little changed yesterday, but for the week cutout has declined sharply.
  • As a result on this week's sharp decline in pork values, packers have reportedly seen profit margins tighten, which is expected to lead to steady to weaker cash bids today.
  • Packers have ramped up their Saturday kill requirements but say they have had no difficulty securing supplies.
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