Ahead of the Open (VIP) -- September 18, 2013

September 18, 2013 03:14 AM

Corn futures are expected to be mixed amid a lack of fresh news.

  • Corn futures ended the overnight session narrowly mixed and didn't stray too far from unchanged in overnight trade.
  • Rains moving across the Corn Belt are limiting buying interest, but this is largely psychological in nature as the crop is rushing toward the finish line and rains are too late to help much of the crop fill.
  • Traders are also keeping an eye on outside markets as investors wait on the Fed's actions on whether or not it will taper its Treasury and mortgage-backed securities purchases.
  • December corn futures are hovering above the psychological $4.50 level. Violation of this support would have bears targeting the August low of $4.45 3/4.


Soybean futures are called 6 to 10 cents higher amid strong demand.

  • Soybean futures saw two-sided trade overnight but ended near session lows and 3 to 5 cents lower. While recent price pressure leaves soybeans vulnerable to profit-taking, demand news should regenerate buying interest this morning.
  • The sharp break since last Friday's high has attracted strong demand. USDA reported a daily sale of 1.93 MMT of soybeans to China and another 182,000 MT of soybeans to an unknown destination -- both for 2013-14.
  • Rains moving across the Corn Belt the remainder of the week will benefit late-filling soybeans and may limit buying interest
  • Traders are also keeping a close eye on outside markets as investors await this afternoon's statement from the Federal Reserve on its bond-buying program.


Wheat futures are called steady to 1 cent higher on light short-covering.

  • Wheat futures ended the overnight session fractionally to 1 cent higher in lackluster trade.
  • Futures didn't stray too far from unchanged overnight given a lack of fresh news.
  • Therefore, wheat is vulnerable to price direction from neighboring markets as well as outside markets as investors brace for this afternoon's statement from the FOMC.
  • The U.S. dollar index is chopping around unchanged this morning, but remains in its downtrend from the September high.
  • Improved soil moisture conditions across the Plains are also serving as a wet blanket for wheat, limiting buying to short-covering.


Live cattle futures are called to open mixed as traders wait on cash trade to develop.

  • Live cattle futures closed slightly lower yesterday, but off session lows, which signals the potential for short-covering this morning.
  • But a lackluster tone in the boxed beef market will limit buying as it creates uncertainty about the cash market.
  • Choice boxed beef values slipped a penny yesterday and Select declined 67 cents on light movement of 179 loads.
  • While this week's showlist is down from last week in Texas and Kansas, packer demand is uncertain.


Lean hog futures are called to open higher based on strength in the pork market.

  • Following yesterday's slight to sharp losses, lean hog futures are expected to open higher due to strength in the pork market.
  • The pork cutout value firmed $1.96 yesterday on strong movement of 405.12 loads.
  • Strength in the pork market helped to trim packers' losses, but their margins remain in the red.
  • The cash hog market is expected to be mixed amid variable demand today. Some packers are still in need of supplies and others have cut back on kill hours.
  • The CME lean hog index is projected at $95.33, which opens additional near-term upside potential for nearby futures as they hold a discount to the cash index.
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