Ahead of the Open (VIP) -- September 24, 2013

September 24, 2013 03:16 AM
 

Corn futures are called mixed in lackluster trade.

  • Corn futures favored a weaker tone in overnight trade but didn't stray too far from unchanged and ended narrowly mixed.
  • With little fresh news for the market to digest, traders' focus is on the ongoing harvest.
  • While yesterday's progress report showed harvest is only 7% complete, traders expect basis to continue softening as it progresses.
  • Meanwhile, our weighted Crop Condition Index (0 to 500 point scale) shows the corn crop improved 2 points to 344.
  • Signaling prices are at levels that are stimulating fresh demand, USDA announced Colombia has purchased 180,000 MT of 2013-14 corn.
  • Gulf corn basis is steady for immediate delivery to stand 52 cents over December futures, but has softened by 7 cents for late-2013 delivery.

 

Soybean futures are called to open 8 to 10 cents higher amid short-covering.

  • Soybean futures ended the overnight session 7 to 11 cents higher on ideas recent losses were overdone.
  • Signals that export demand picked up as futures softened is providing a lift for futures this morning.
  • But it will be difficult for soybeans to post a strong rally in the face of ongoing harvest activity.
  • Meanwhile, our weighted Crop Condition Index (0 to 500 point scale) shows the soybean crop firmed 1 point to 335.
  • Gulf soybean basis is steady for immediate delivery to stand 91 cents over November futures and has firmed by a penny for December delivery.

 

Wheat futures are called mixed amid position squaring.

  • SRW and HRW futures ended the overnight session mixed, with prices 2 cents lower to 2 cents higher. HRS was marginally to 1 cent higher.
  • Wheat continues to watch price action in neighboring pits closely, but traders are also encouraged by a recent pickup in export activity.
  • Yesterday's progress report showed winter wheat planting is 23% complete, which is one percentage point below the five-year average. Planting is running near the average pace in Kansas, Oklahoma and Texas.
  • Gulf SRW wheat basis is steady this morning to stand 64 cents over December futures.

 

Live cattle futures are called to open higher on followthrough from yesterday's gains.

  • Live cattle futures are expected to build on yesterday's gains as traders still have Friday's bullish Cattle on Feed Report on their minds.
  • Yesterday's Cold Storage Report was also positive for futures as it showed frozen beef stocks down 6.2% from the previous month.
  • Expectations for higher cash cattle trade are also building due to the strong start in the boxed beef market and tighter showlists.
  • Choice beef values improved $1.16 and Select rose 83 cents yesterday on decent movement of 162 loads.
  • A choppy tone in the corn market is also supportive for feeder futures.

 

Lean hog futures are called to open steady to firmer on spillover from cattle and a positive Cold Storage Report.

  • Lean hog futures are expected to see light followthrough from yesterday's slight gains, with additional support coming on spillover from live cattle futures.
  • Yesterday's Cold Storage Report is also expected to give lean hog futures a lift as it showed frozen pork stocks below expectations and down 7.8% from year-ago levels.
  • Meanwhile, demand for cash hogs is varied. Cash bids were steady to firmer yesterday at some locations due to tighter supplies, but some packers have opted to reduce kill hours this week.
  • With packers turning more focus to improving profit margins, cash bids are expected to be steady to lower.
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