Ahead of the Open (VIP) -- September 13, 2013

September 13, 2013 03:14 AM
 

Corn futures are called 1 to 2 cents lower in all but the expiring September contract.

  • Front-month corn futures ended the overnight session 1 3/4 cents higher, with new-crop futures 1 to 2 cents lower.
  • New-crop futures saw limited followthrough pressure from yesterday's bearish USDA reports, which signals traders believe USDA has overestimated the crop.
  • But buying is being limited as traders realize it's going to take time -- at "lower" prices to rebuild the corn demand base.
  • Mild temps have returned to the Corn Belt and there's widespread rain chances for the region this weekend. This could help some filling crop, although much of the crop has shut down after the recent, extended period of extreme heat.
  • September corn futures expire at noon CT today.

 

Soybean futures are expected to see a mixed start as traders even positions ahead of the weekend.

  • Soybean futures ended the overnight session mixed, with the front-month contract down 7 cents and new-crop futures up 1 3/4 cents to 3 cents lower.
  • November soybean futures favored a firmer tone in overnight trade on followthrough from yesterday's sharp gains and high-range close.
  • Traders still have yesterday's lower-than-expected carryover peg on their minds, as it reaffirmed traders' bullish attitudes.
  • Given the strong demand base, downside risk should be limited to profit-taking in the soybean market, although the soybean:corn price ratio is certainly lopsided.
  • September soybean and soy product futures expire at noon CT.

 

Wheat futures are called 2 to 4 cents lower on a lack of fresh positive news.

  • SRW wheat futures ended the overnight session mostly 4 to 6 cents lower, while HRW was 3 to 6 cents lower and HRS was 1 to 2 cents lower.
  • Buying interest will be limited by a lack of fresh supportive news.
  • Traders still have yesterday's USDA reports on their minds, in which the agency raised 2013-14 U.S. carryover by 10 million bu. from the previous month, which was more than expected.
  • USDA also raised global carryover more than expected, which reminded them of the need to keep U.S. wheat competitively priced.
  • Traders' focus will be on position squaring ahead of the weekend.
  • September wheat futures expire at noon CT today.

 

Live cattle futures are called to open steady to firmer on better-than-expected cash cattle trade.

  • Live cattle are expected to see a boost this morning from news that cash cattle trade began at steady prices with last week late Thursday.
  • Packers started bidding $121 ($2 lower than last week) for cash cattle but raised bids to be steady $123 prices, which reflects better-than-expected demand for supplies.
  • Boxed beef movement has generally been stronger this week, which most believe is behind the steady cash cattle tone.
  • Choice beef values softened 8 cents and Select declined $1.24 yesterday on solid movement of 208 loads Thursday.
  • Slight weakness in the corn market should provide an extra boost for feeder cattle futures this morning.

 

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

  • Lean hog futures are expected to be steady to weaker this morning on profit-taking as futures are overbought.
  • Fundamental pressure is expected from yesterday's $1.31 drop in pork cutout values amid slower movement of 290.4 loads.
  • Traders will be keeping a close eye on the pork market for signs of a seasonal top.
  • The cash hog market is called mixed amid variable demand. Cooler temps across the Midwest are expected to increase hog movement moving forward.
     
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