Ahead of the Open (VIP) -- October 8, 2013

October 8, 2013 03:15 AM

Corn futures are called to open 1 to 2 cents lower on light profit-taking.

  • Corn futures ended the overnight session mostly around 2 cents lower on light profit-taking following yesterday's gains.
  • Ideas harvest will ramp back up this week after weekend rain delays raises concern about hedge-related pressure.
  • A slightly firmer tone in the U.S. dollar index is also limiting buying.
  • But a firmer tone in the wheat market is helping to limit pressure in corn and could result in fresh buying during daytime trade.
  • Meanwhile, France's farm ministry cut its corn crop estimate by 100,000 MT to 15.5 MMT, but that's still up 2.9% from year-ago.


Soybean futures are called steady to 2 cents higher in lackluster trade.

  • Soybean futures ended the overnight session fractionally to 2 cents higher, which was near session lows.
  • Soybeans favored a firmer tone throughout the overnight hours on followthrough from yesterday's gains, although buying dried up in late trade.
  • Expectations soybean harvest will resume after weekend rains is limiting buying, although expectations that demand remains strong is limiting selling to profit-taking.
  • November soybean futures spent the overnight session pivoting around the all-important $13.00 level. Closes above this resistance would make the $13.30 level bulls' next target.


Wheat futures are called 3 to 5 cents firmer on improved demand.

  • All wheat flavors ended the overnight session mostly 3 to 5 cents higher on followthrough from yesterday's gains.
  • Wheat is seeing a boost from winter weather that has halted seeding of winter grains across areas of Russia and Ukraine. Traders anticipate lower production potential in the Black Sea region will bring fresh demand to the U.S.
  • Buying is being somewhat limited by a choppy tone in the dollar index this morning, although recent weakness has helped keep U.S. wheat competitive on the global market.
  • Meanwhile, France's farm ministry cut its wheat crop estimate by 117,000 MT from last month to 36.9 MMT, although that still represents a 3.8% increase from year-ago.


Live cattle futures are called to open firmer on tighter showlists.

  • Live cattle futures are expected to more than recover yesterday's slight losses due to tightening market-ready supplies.
  • While traders still lack slaughter and boxed beef data due to the government shutdown, an initial count of this week's showlists shows cattle available to the cash market are reduced from last week.
  • As a result, feedlots have the upper hand in this week's cash negotiations, although cash trade will likely be delayed until Friday.
  • Meanwhile, packers' profit margins are well in the red, which limits their willingness to bid up for cattle.
  • A slightly weaker tone in the corn market is supportive for feeder futures this morning.


Lean hog futures are called to open firmer on light followthrough from yesterday's gains.

  • Lean hog futures are expected to be firmer on followthrough buying after yesterday's gains, although the front-month contract ended slightly lower yesterday.
  • Without daily slaughter and pork cutout data, traders are left watching the cash market more closely.
  • With packers' profit margins well in the black, the cash market is expected to be mostly steady today as it maintains a strong level of demand for supplies.
  • However, upside potential in the cash market this week will be limited as packers say they are having no difficulty securing supplies.
  • December lean hog futures have posted a strong recovery from the early October low and now appear headed for a test of contract-high resistance.
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