Ahead of the Open (VIP) -- September 16, 2013

September 16, 2013 03:14 AM

Corn futures are expected to start the day where the overnight session left off, trading narrowly mixed.

  • Corn futures ended the overnight session narrowly mixed in lackluster trade.
  • Buying is being limited to short-covering given prospects for a large increase in carryover due to a recovery in the crop compared to year-ago.
  • Ideas the market is due for a corrective bounce helped to limit pressure overnight.
  • Weather improvements are also limiting buying, although most of the crop across the Corn Belt has "shut down" and will see limited help from this week's forecast rains.
  • Sunday's computer-generated National Weather Service 6-10 day forecast calls for above-normal temps across the Corn Belt and a mix of precip. Above-normal precip in northeast Indiana and across Ohio would help with late-filling crops there.


Soybean futures are called 10 to 15 cents lower on weather improvements.

  • Soybean futures gapped lower to start the overnight session and ended 8 to 14 cents lower through the July 2014 contract.
  • While the soybean crop across the drought region of the Corn Belt has started to drop leaves, a large portion of the crop is still "green" and could benefit from this week's forecast rains.
  • The latest NWS 6-10 day forecast calls for above-normal temps across the Corn Belt and a mix of precip. Drier conditions are expected to continue in areas of the western Belt, with above-normal precip in the far eastern Belt.
  • China will not hold its weekly soybean auction this week due to public holidays.
  • Bulls will hold the technical advantage as long as futures respect the late-August gap areas.


Wheat futures are called mixed amid a lack of fresh news.

  • Wheat futures ended the overnight session narrowly mixed across all flavors.
  • Wheat is expected to follow choppy price action in the corn market this morning.
  • Sharp weakness on the U.S. dollar index is helping to limit pressure.
  • There were no wheat tenders made over the weekend. The market needs a dose of fresh demand news to energize bulls.
  • After recent rains, a mix of conditions are expected across the Central and Southern Plains. The latest NWS 6-10 day forecast calls for below-normal precip for Colorado and far western Kansas, with above-normal precip across central Texas. Normal precip is expected across the rest of the region.


Live cattle futures are called to open steady to firmer on light followthrough from Friday's gains.

  • Live cattle are expected to see light followthrough buying from Friday as traders are cautiously optimistic about near-term cash prospects.
  • Packers were forced to keep bids steady last week after lower bids were rejected by feedlots.
  • This signals to traders that market-ready supplies have tightened.
  • Traders will be keeping a very close watch on the boxed beef market early this week after movement improved last week.
  • Feeder cattle futures are expected to see spillover from live cattle as well as a mixed tone in the corn market.


Lean hog futures are called to open mixed to start the week.

  • Lean hog futures are expected to start the week narrowly mixed as traders remain cautious about a seasonal high being in place.
  • The cash hog market is expected to be mostly steady to start the week. Some plants are in need of supplies while others expect movement to pick up as producers catch up with marketings following several weeks of extreme heat.
  • All eyes will be in the pork cutout market after values firmed on Friday. Key will be if movement remains strong at current historically high prices.
  • There is more room to the upside for October hogs as they hold around a $3 discount to the cash index.
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