Ahead of the Open (VIP) -- September 3, 2013

September 3, 2013 03:14 AM
 

Corn futures are called to open 5 to 10 cents higher on crop concerns.

  • Corn futures ended the overnight session 4 to 6 cents higher on disappointing weekend weather.
  • Traders' concerns about the filling corn crop were heightened after forecasts for weekend showers were a disappointment.
  • While temps have moderated across the Corn Belt, forecasts call for heat to rebuild later this week.
  • As a result of last week's hot and dry conditions, traders expect this afternoon's crop condition data from USDA to reflect continued deterioration in the crop.
  • Also supportive is news China's ag minister said the country will "gradually increase" corn imports due to rising demand.
  • December corn futures gapped higher to start the overnight session but need to close above the August high of $5.08 1/4 to signal a near-term low has been posted.

 

Soybean futures are called to open 30- to 40-plus cents higher on weather concerns.

  • Soybean futures ended the overnight session 32 to 46 cents higher on concerns about the filling soybean crop.
  • Forecasts for weekend rains failed to provide widespread relief after extreme heat stressed the soybean crop last week.
  • While temps have eased across the Belt, heat is expected to rebuild later this week and there's little rain in the near-term forecast.
  • Traders expect this afternoon's crop condition report to reflect deterioration in the soybean crop.
  • November soybean futures gapped sharply higher to start the overnight session and are testing resistance at last week's high of $14.09 1/2. Contract-high resistance is at $14.09 3/4.

 

All wheat flavors are called to open 3 to 6 cents higher on spillover from neighboring pits.

  • All wheat flavors enjoyed spillover from strength in the corn and soybean markets overnight, leading to expectations for more of the same during daytime trade.
  • But limiting buying enthusiasm is a strengthening U.S. dollar index due to unrest in Syria and the possibility of U.S. involvement.
  • Further evidence that U.S. wheat is losing its competitive edge on the global front came on news that Egypt purchased 355,000 MT of Russian, Ukrainian and Romanian wheat over the weekend.
  • Meanwhile, Japan is seeking 116,350 MT of U.S. and Canadian wheat.

 

Live cattle futures are called to open mixed as traders monitor the beef market.

  • Live cattle futures ended last week with slight gains to remain within the boundaries of the recent choppy consolidation range.
  • Traders will be monitoring the boxed beef market closely to start the week to gauge demand given tightening supplies and historically high beef prices.
  • Cash cattle generally traded steady in the Plains late on Friday at $123.
  • October live cattle, which are now the lead-month contract, will start the week at around a $4 premium to the cash index.

 

Lean hog futures are called to open mixed as traders wait to gauge the cash market tone.

  • Traders are reevaluating positions after lean hog futures posted sharp weekly gains last week.
  • Futures are vulnerable to profit-taking, but pressure should be limited by the discount nearbys hold to the cash index.
  • But cash sources look for the cash hog market to start the week under pressure as packers say they will have no difficulties securing supplies and producers are working to get marketings current after last week's heat wave.
  • Pork cutout values slipped $1.87 on Friday and movement was light at 281.3 loads. A continuation of weakness in the pork market will add to cash pressure.
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