Ahead of the Open (VIP) -- September 6, 2013

September 6, 2013 03:16 AM

Corn futures are called 1 to 3 cents higher on short-covering.

  • Corn futures ended the overnight session mostly 1 to 2 cents higher on short-covering.
  • Key will be how aggressively funds decide to cover short positions ahead of the weekend.
  • While traders recognize some yield damage has been done, they still expect a record crop.
  • The NWS forecast for Sept. 11-15 calls for above-normal temps to continue and a mix of precip. Drier conditions are expected to continue across the western Belt and above-normal precip is expected across Indiana and Ohio.
  • The Weekly Export Sales Report showed net sales reductions of 113,200 MT for 2012-13 and sales of 328,300 MT for 2013-14. Combined, the tally was below expectations.


Soybean futures are called to open 3 to 5 cents higher on weather concerns.

  • Soybean futures ended the overnight session mostly 1 to 3 scents higher in quite trade.
  • Soybeans are enjoying followthrough from yesterday's late-session recovery.
  • Traders remain concerned about stressful pod-filling conditions, with above-normal temps expected to continue until at least mid-month.
  • This morning's weekly sales report reflects continued strong demand for new-crop beans. Sales of 5,100 MT were reported for 2012-13, with sales of 844,100 MT for 2013-14. China was the lead buyer and the combined tally came within expectations.


Wheat futures are called to open 2 to 3 cents higher on spillover from neighboring pits.

  • All wheat flavors favored a firmer tone overnight amid short-covering, but the markets saw scattered selling at times.
  • Wheat remains in a follower's role and without help from the corn market and fresh demand news, buying continues to be limited to short-covering.
  • Wheat is also expected to benefit from weakness in the U.S. dollar index this morning.
  • Traders are also awaiting results from an Egyptian wheat tender.
  • Futures should also find support from the Weekly Export Sales Report, as it showed sales of 668,400 MT for 2013-14 and 79,000 MT for 2014-15, with the overall tally coming in above expectations. Brazil was the lead buyer.


Live cattle futures are called to open slightly to moderately lower on followthrough pressure.

  • Live cattle futures are working on moderate to sharp losses for the week, with upside potential limited to short-covering ahead of the weekend.
  • Traders are working to narrow the premium nearbys hold to last week's cash trade.
  • Packers' bids and feedlots' asking prices remain several dollars apart, signaling cash trade may be delayed until this afternoon.
  • Tighter market-ready supplies have feedlots thinking they have the upper hand, but most are expecting steady trade with last week's $123 action.
  • Weakness in the beef market also bodes well for bears this morning. Choice values softened by 70 cents and Select was down 22 cents on strong movement of 218 loads.


Lean hog futures are called to open lower on weakness in the pork market.

  • Lean hog futures are vulnerable to profit-taking as traders even positions ahead of the weekend.
  • Pork cutout values slipped 36 cents yesterday, which is expected to add to the weaker tone in futures this morning. But movement was strong at 479.6 loads.
  • Pressure may be limited by a better-than-expected cash tone. Cash hog bids are expected to remain steady to firmer to close out the week.
  • Weather concerns have also been supportive this morning, as traders recognize that hot temps are trimming hog weights and slowing marketings.
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