Ahead of the Open (VIP) -- October 1, 2013

October 1, 2013 03:18 AM
 

Corn futures are called to open 2 to 5 cents lower on followthrough from yesterday's losses.

  • Corn futures ended the overnight session mostly around a penny lower but there is risk of stepped up price pressure at the start of daytime trade.
  • Traders still have yesterday's bearish Quarterly Grain Stocks Report on their minds.
  • Mild risk-aversion in outside markets comes amid the partial shutdown of the federal government. Investors don't expect the shutdown to be long-lasting, but gridlock in Congress is reason for concern.
  • Yesterday's progress report showed harvest running behind the five-year average, which raises concerns that seasonal price pressure could be long-lasting.
  • December corn futures violated key support by closing below the August low yesterday. A low-range close again today would confirm the downside breakout and make bears' next target $4.20 and then $4.00.

 

Soybean futures are called to open 10 to 20 cents lower on followthrough pressure.

  • Soybean futures ended the overnight session 10 to 15 cents lower on followthrough from yesterday's losses.
  • Traders still have yesterday's larger-than-expected grain stocks data on their minds.
  • A slight uptick in the condition of the soybean crop is also a negative factor for the market this morning.
  • Wire services are reporting a daily soybean sale to China of 113,000 MT for 2013-14 delivery.
  • While a weaker U.S. dollar index is positive for grain markets, gold and crude oil are also lower amid mild risk aversion due to the partial government shutdown.
  • November soybean futures gapped slightly lower in overnight trade and extended losses. The next landing area for bears is the psychological $12.50 level.

 

Wheat futures are called 1 to 5 cents lower on spillover from neighboring markets.

  • SRW and HRW wheat ended the overnight session 1 to 5 cents lower, with HRS narrowly mixed.
  • Risk-aversion in outside markets and pressure on corn and soybean futures is expected to weigh on wheat futures during daytime trade.
  • While a weaker U.S. dollar index helps to keep U.S. wheat competitive on the global market, sharp weakness in gold futures this morning signals investors are moving to the sidelines.
  • Yesterday's USDA reports were fairly neutral for the wheat market, as there were no major surprises and the stocks data reflected strong demand in the latest quarter.
  • Wheat is vulnerable to some profit-taking following recent gains. Key will be if uptrending support levels are violated, as that would suggest near-term highs are in place.

 

Live cattle futures are called to open mixed as traders are cautiously optimistic about the cash market.

  • Live cattle futures saw light profit-taking yesterday, but futures finished well off session lows.
  • There is risk of additional profit-taking this morning due to the partial government shutdown and the risk-aversion it creates in the marketplace.
  • But tighter market-ready supplies and strength in the beef market to start the week are positive developments for this week's cash trade.
  • Choice beef values were 62 cents firmer yesterday and Select rose $1.46. Movement was lackluster at 147 loads, however.
  • Weakness in the corn market is positive for feeder futures this morning, although nearby contracts hold a sharp premium to the cash index, which raises the risk of profit-taking.

 

Lean hog futures are called to open mixed on a combination of followthrough pressure and short-covering.

  • Lean hog futures run the risk of followthrough from yesterday's sharp losses as traders still have Friday's Quarterly Hogs & Pigs Report on their minds.
  • But some short-covering is also possible as traders reevaluate positions.
  • Pork cutout values firmed 31 cents yesterday and 268.95 loads changed hands. Traders will watch to see if pork demand picks up this week, as a slowdown would suggest high prices are slowing demand.
  • The cash hog market is called steady to weaker as packers say this week's supplies are largely booked and they are enjoying profitable margins.
Back to news


Comments

 
Spell Check

No comments have been posted to this News Article

Corn College TV Education Series

2014_Team_Shot_with_Logo

Get nearly 8 hours of educational video with Farm Journal's top agronomists. Produced in the field and neatly organized by topic, from spring prep to post-harvest. Order now!

Markets

Market Data provided by QTInfo.com
Brought to you by Beyer
Close