Ahead of the Open (VIP) -- October 2, 2013

October 2, 2013 03:15 AM

Corn futures are called to open steady to 1 cent lower on light followthrough pressure.

  • Corn futures ended the overnight session marginally to 1 cent lower in lackluster trade.
  • Expectations harvest progress is picking up limited buying in the corn market overnight to short-covering given recent technical deterioration that points the market lower near-term.
  • Additional pressure came from news INTL FC Stone has raised its corn crop estimate to 14.150 billion bu. on a national average yield of 158.7 bu. per acre.
  • Gulf corn basis is 2 cents firmer for immediate delivery to stand 64 cents over December futures, which suggests improved demand. Basis for November delivery, however, softened by a penny.


Soybean futures are called to open 5 to 10 cents higher on short-covering.

  • Soybean futures ended the overnight session 4 to 7 cents higher on short-covering following yesterday's losses.
  • But buying was limited given expectations a pickup in the harvest pace will maintain pressure on interior basis levels.
  • However, Gulf basis for immediate delivery improved 2 cents to 90 cents over November futures to suggest demand remains strong.
  • Traders are also reacting to news that INTL FC Stone has raised its soybean crop forecast to 3.163 billion bu. on a national average yield of 41.4 bu. per acre.
  • November futures have their work cut out for them to signal a near-term low has been posted given the recent extended price slide.


Wheat futures are called steady to 2 cents firmer on demand prospects.

  • All wheat flavors were choppy overnight, but the markets favored a firmer tone.
  • Wheat is expected to benefit from improved demand prospects, as recent export data signals U.S. wheat is once again competitive on the global market.
  • Ongoing reports that the protein levels of spring wheat in Canada are below year-ago levels adds support to the HRS market.
  • Weakness in the U.S. dollar index is positive for wheat futures this morning, as well as corrective buying in gold futures.


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

  • Live cattle futures came off session lows yesterday to end mixed, which could attract followthrough buying this morning.
  • But buying in live cattle will be limited due to concerns about the impacts the partial government shutdown will have on meat demand.
  • This week's market-ready supplies are smaller than last week, but without boxed beef prices (no data is available due to the government shutdown), it's difficult for traders to form opinions about the cash market.
  • Tight calf supplies should limit pressure on feeder futures this morning, with weakness in the corn market also a positive factor.


Lean hog futures are called to open steady to lower amid profit-taking.

  • Lean hog futures are expected to see followthrough from yesterday's losses, as well as a lack of data given the partial shutdown of the federal government.
  • Traders are lacking daily slaughter and pork cutout data, causing them to trim their long exposure to the market.
  • Traders also still have last week's Quarterly Hogs & Pigs Report on their minds, which showed supplies more plentiful than expected.
  • The cash hog market is called steady to $1 lower as packers say they are well supplied this week.
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