Ahead of the Open (VIP) -- October 15, 2013

October 15, 2013 03:13 AM

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

  • Corn futures didn't stray too far from unchanged overnight, but favored a firmer tone on short-covering.
  • But buying is being limited by sharp strength in the U.S. dollar index that's being spurred by news lawmakers may be close to a deal on the federal budget.
  • Traders expect harvest-related hedge pressure to continue building.
  • Gulf corn basis is steady to 1 cent weaker for nearby delivery this morning, which suggests 2013 crop supplies are coming available.


Soybean futures are called 2 to 4 cents lower amid spreading.

  • Soybean futures ended the overnight session mostly 2 to 4 cents lower, but some scattered buying was seen in far deferred contracts amid spreading.
  • Nearby futures are being pressured by harvest progress, which is resulting in an increase in hedge-related price weakness.
  • Gulf soybean basis is steady this morning to signal supply and demand are in balance. This does not suggest China is on a buying spree.
  • Strength in the U.S. dollar index is also adding pressure to the soy complex.


Wheat futures are called 1 to 2 cents lower amid dollar strength.

  • All wheat flavors ended the overnight session 1 to 2 cents lower amid profit-taking.
  • Strength in the U.S. dollar index raises concerns about the competitiveness of U.S. wheat on the global market.
  • Helping to limit pressure are concerns about drought lowering production potential in China's top growing region.
  • Additionally, Ukraine reportedly has only about 76% of its intended winter wheat area seeded.


Live cattle futures are called to open slightly higher on followthrough buying.

  • Live cattle futures are expected to see a boost this morning on followthrough from yesterday's gains.
  • After packers were forced to pay $128 for cash cattle in the Southern Plains last week, traders look for at least steady cash trade this week.
  • Additionally, this week's cattle showlist is smaller than last week.
  • According to Urner Barry, boxed beef prices rose sharply to start the week, which raises expectations for firmer cash cattle trade later this week.
  • Feeder futures are expected to see a boost from tightening calf supplies.


Lean hog futures are called mixed, with buying limited to short-covering.

  • Lean hog futures are expected to see a continuation of yesterday's trend and trade mixed.
  • December hogs are now the lead-month contract and are trading at a discount to the newly expired October contract.
  • But without a cash index to gauge against futures, traders remain cautious about extending positions in either direction.
  • The cash hog market started the week mixed due to varied demand and more of the same is expected today.
  • Livestock futures could see a boost from the stock market this morning as investors are cautiously optimistic lawmakers are near a budget deal to reopen the government.
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