Ahead of the Open (VIP) -- October 24, 2013

October 24, 2013 03:23 AM
 

Corn futures are called to open 1 to 2 cents lower to maintain this week's choppy tone.

  • Corn futures ended the overnight session 1 to 2 cents lower to maintain this week's back-and-forth price action.
  • After yesterday's gains, buying was limited due to harvest-related hedge pressure.
  • This morning's weekly export sales data showed corn sales in excess of 1.341 MMT for 2013-14, which came in well above expectations.
  • The much-stronger-than-expected sales tally could generate some fresh short-covering this morning as it shows importers took advantage of a weaker dollar and the reporting blackout during the government shutdown.
  • Additionally, USDA announced a 210,000-MT corn sale to Mexico for 2014-15 this morning.
  • Gulf corn basis is steady to 1 cent higher this morning. Immediate delivery stands 69 cents over December futures.

 

Soybean futures are called mixed with an upside bias amid sales data.

  • Soybean futures came off session lows in overnight trade to end marginally lower in most contracts.
  • Futures saw a late lift overnight from news of soybean export sales of 929,800 MT for 2013-14 the week ended Oct. 3, which matched lofty expectations.
  • Even more impressive is that USDA reports soymeal sales of 850,100 MT, which was more than three times traders' expectations.
  • However, Gulf soybean basis is 1 to 2 cents weaker for immediate delivery this morning to signal demand has softened as new supplies come available.
  • November soybean futures ran into resistance around the $13.20 level yesterday, but bulls still have the technical advantage as closes above $13.00 signal a low has been posted.

 

Wheat futures are called to open 2 to 3 cents lower on spillover from neighboring pits.

  • SRW and HRW wheat ended the overnight session 3 to 4 cents lower, with HRS mixed.
  • Wheat is vulnerable to spillover from neighboring corn and soybean markets this morning, although pressure should be limited by global crop concerns.
  • The U.S. dollar index is choppy this morning, but recent weakness is helping to keep U.S. wheat competitive on the global market.
  • This morning's Weekly Export Sales Report showed sales of 653,600 MT for 2013-14, which met expectations.

 

Live cattle futures are called to open mixed amid position squaring.

  • Live cattle futures are called to open mixed as traders are cautious about the recent rise in the cash cattle market.
  • Cash cattle trade began yesterday between $132 and $133, which is up from $129 to $130 last week. With cash trade rising to record levels this week, traders are uncertain about how much more upside there is in the near-term.
  • October and December live cattle futures are trading in line with the cash market.
  • Choice beef values rose $1.46 yesterday to $200.79 per cwt. and Select rose $1.88. A solid 181 loads of cuts changed hands.
  • Weakness in the corn market this morning is supportive for feeder futures.

 

Lean hog futures are called steady to weaker on softer pork prices.

  • Lean hog futures are expected to be pressured this morning by deterioration in the pork cutout market.
  • Pork values slipped $1.60 yesterday to tighten packer profit margins. But lower prices spurred strong movement of 438.47 loads.
  • Packers say they are having no difficulty securing needed supplies, but with harvest activity picking up, they are keeping bids steady this morning.
  • Pressure will also be limited by the discount December hogs hold to the CME lean hog index, which is projected at $91.25.

 

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