Ahead of the Open (VIP) -- September 9, 2013

September 9, 2013 03:23 AM
 

Corn futures are called to open 2 to 3 cents lower on followthrough from overnight losses.

  • Corn futures ended the overnight session mostly 2 to 3 cents lower on expectations for a record corn crop despite ongoing weather concerns.
  • Sunday's computer-generated National Weather Service forecast for Sept. 14-18 calls for above-normal temps across the bulk of the country, with below-normal precip expected to linger across the Corn Belt.
  • Heat and dryness has traders expecting another downtick in this afternoon's crop condition ratings from USDA.
  • Traders' focus is also on position squaring ahead of Thursday's Crop Production Report, which is expected to reflect a smaller corn crop than last month. This could trigger some short-covering.
  • Gulf corn basis for immediate delivery has slipped 8 cents to stand 60 cents over
    December futures, reflecting soft demand.

 

Soybean futures are called to open 5 to 10 cents higher on weather concerns.

  • Soybean futures ended the overnight session 3 to 10 cents higher, with September leading gains.
  • Tight old-crop stocks are supporting nearby futures, with new-crop futures supported by concerns about the weather.
  • Excessive heat across the Corn Belt today and Tuesday is expected to be followed by a gradual cool down.
  • But the latest NWS 6- to 10-day forecast calls for hot and dry conditions to linger.
  • According to official Chinese trade data, the country imported 6.37 MMT of soybeans in August, which is down 11.5% from July, but 44.1% higher than year-ago.
  • Meanwhile, growth in Chinese exports and a widening of the trade surplus point to economic stability.
  • Traders' focus is also on evening positions ahead of Thursday's USDA Crop Production Report, which is expected to expected to show a drop in crop size from last month.
  • Gulf soybean basis is steady this morning for immediate delivery to stand $1.30 over November futures.

 

All wheat flavors are called 2 to 4 cents lower on spillover from corn futures.

  • All wheat flavors ended the overnight session mostly 2 to 4 cents lower on spillover from corn and a lack of fresh news.
  • With little fresh news for the wheat market to digest this morning, traders are taking their cue from neighboring pits.
  • Weakness in the U.S. dollar index is limiting pressure this morning.
  • Traders are also starting to pay more attention to the weather situation in the Plains, as excessive temperatures have increased moisture needs.
  • Gulf SRW wheat basis is a penny firmer this morning to stand 17 cents over December futures for immediate delivery.

 

Live cattle futures are called to open mixed as traders reevaluate positions.

  • Following last week's losses, live cattle futures are due for a short-covering bounce.
  • But upside potential will be limited by concerns about beef demand.
  • Choice beef values slipped 63 cents on Friday and Select declined 72 cents. Movement was light at 146 loads.
  • Traders are also disappointed by last week's steady to weaker cash cattle trade, which mostly occurred at $123.
  • Traders will be monitoring beef trade this week, as well as this week's showlist, before they make cash predictions.

 

Lean hog futures are called to open mixed as traders reevaluate positions.

  • Lean hog futures are expected to see a choppy start, with traders reevaluating positions after futures posted sharp gains last week.
  • Hog futures are vulnerable to profit-taking, but bulls have momentum on their side as technicals are bullish.
  • Pork cutout values firmed 35 cents on Friday amid decent movement of 309 loads.
  • The cash hog market is expected to be mostly steady today, but some firmer bids could surface on concerns about hog weights due to excessive heat across the Corn Belt.

 

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