Market Snapshot, 10:00 a.m. CT -- (VIP) -- August 29, 2013

August 29, 2013 05:02 AM

Corn futures have chopped around unchanged this morning; futures are currently around a penny higher in most contracts.

  • Sharp gains in the U.S. dollar index has encouraged bouts of profit-taking this morning as some are readying positions for a long holiday weekend. GDP for the second quarter expanded at a much stronger-than-expected 2.5% rate thanks to a surge in exports.
  • But otherwise, selling interest is limited as temps in the 90s to 100s° F in the Corn Belt are stressing crops, especially since the region is very dry and the forecast holds little chance of rain.
  • Emphasizing this is this morning's drought monitor which shows drought is in effect for much of the upper and western Midwest. One hundred percent of Iowa is now covered in some form of drought.
  • This morning's Weekly Export Sales Report showed net sales reductions of 15,000 MT for 2012-13, but sales of 673,800 MT for 2013-14. The solid total signals prices have brought exporters back to the table.
  • Gulf basis firmed a penny for September delivery this morning and it held steady for other months.


Soybean futures are mostly 2 to 4 cents higher, with the front-month posting double-digit gains.

  • Weather concerns are lifting the soybean market again as heat is expected to continue into next week with little rain in the 5-day or the 6- to 10-day outlook.
  • And the soybean crop is already dealing with the challenges of dry soils and slow development. Drought has expanded in the Midwest.
  • Adding to supply concerns is this morning's reminder of strong new-crop soybean demand. This morning's Weekly Export Sales Report showed net soybean sales reductions of 3,200 MT for 2012-13, but sales of 868,700 MT for 2013-14.
  • Strength in the U.S. dollar index is keeping bullish enthusiasm in check, however.


Wheat futures are 2 to 4 cents lower in most contracts at all three locations.

  • Wheat's disappointing finish yesterday is encouraging light followthrough sales today.
  • Strength in the U.S. dollar index on better-than-expected second quarter GDP growth is adding pressure as it makes U.S. wheat prices less competitive.
  • But this morning's weekly export sales of 551,300 MT for 2013-14 met expectations and improved from the week prior, signaling solid demand for U.S. wheat.
  • SovEcon raised its forecast for the Russian wheat crop to 51.7 MMT, but the firm left is exportable surplus forecast at 14.5 MMT.
  • Wheat needs strong spillover from corn to rally and that is lacking so far today.


Live and feeder cattle futures are off to a narrowly mixed start.

  • Packers raised their bids in the South by a $1, signaling cash cattle trade may get underway today. Last week, trade took place at mostly at $123 in the Southern Plains.
  • But as packers are preparing for a holiday-shortened week, trade is expected to be relatively light. This plus higher showlist estimates this week could make it tough for feedlots to get firmer cash prices.
  • But on the other hand, mixed beef prices yesterday spurred improved movement of 188 loads. While not impressive, this is an improvement from recent light tallies.
  • Also, weekly beef export sales surged to 23,200 MT for 2013 and 300 MT for 2014 the week ended Aug. 22. This compares to sales of 16,100 MT the week prior.
  • Strength in the corn market is encouraging light profit-taking in feeder cattle futures.


Lean hog futures are posting slight gains in early trade.

  • Traders are engaging in some light short-covering ahead of a long holiday weekend.
  • The nearly $9 discount the front-month holds to the cash hog index is also supportive.
  • But short-covering is the extent of buying interest as both the cash and product markets have softened.
  • Ideas cash hog supplies will soon build (heat in the Midwest is delaying this seasonal trend) and light demand ahead of a holiday-shortened week is resulting in steady to $1.50 lower cash hog bids today.
  • Also, the pork cutout value fell $1.60 yesterday, though this did spur strong movement of 484.5 loads.
  • Weekly pork export sales rose 5,500 MT from the week prior to 12,600 MT for the week ended Aug. 22.
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