Market Snapshot, 10:00 a.m. CT -- (VIP) -- August 2, 2013

August 2, 2013 05:00 AM
 

Corn futures are slightly higher with the exception of the lead September contract.

  • New-crop futures are slightly higher in early trading due to short covering.
  • Futures are getting some support from the softer U.S. dollar index, which is weaker on disappointing employment data. The Labor Department reports 162,000 non-farm payrolls were added in July, which came in below expectations, and previous jobs data was downwardly revised.
  • Traders remain negative as they view weather forecasts calling for below-normal temps and increased chances for precipitation through the first half of August as positive for pollination. As a result, they believe yield estimates are rising rather than falling and they increasingly discount concerns of the late-developing crop and holes in the western Corn Belt.
  • Traders are ignoring FC Stone's peg of the U.S. corn crop at 13.993 billion bu., with a yield of 157 bu. per acre. USDA's first survey-based crop estimate will be released Aug. 12.
  • Gulf basis is unchanged in early trading this morning with the exception of the 2 cent rise for December delivery.

 

Soybean futures are 7 to 13 cents higher in early trading.

  • Futures are moving higher this morning on short-covering, pre-weekend position squaring and a weaker U.S. dollar index..
  • The market is also getting some support from FC Stone's latest estimate of the U.S. soybean crop. It pegs the crop at 3.309 billion bu., with a yield of 43 bu. per acre. USDA's first survey-based crop estimate will be released Aug. 12.
  • Traders view weather forecasts as favorable for the growing crop but are reluctant to carry short positions through the weekend less the forecasts change.
  • Gulf soybean basis is down 5 cents for first half August delivery, unchanged for last-half August, 5 cents higher for first-half September, 4 cents higher for last-half September, unchanged for October and November and a penny higher for December.

 

SRW and HRS wheat futures are fractionally to 4 cents higher and HRW futures are fractionally to 6 cents higher.

  • HRW and SRW futures continue to try to mount a post-harvest rally.
  • Short-covering in both corn and soybean futures is also adding to support.
  • Weakness in the U.S. dollar index due to the disappointing jobs data this also providing some lift to wheat futures this morning.
  • Traders are encouraged by the recent pickup in demand for U.S. wheat even though Black Sea origin wheat remains underpriced relative to U.S. wheat.
  • However, traders view weather forecasts as positive for the spring wheat crop.
  • Gulf SRW basis in 1 cent weaker for immediate delivery in early morning trade, unchanged for other delivery periods with the exception of a 1-cent increase for December delivery.

 

Live cattle futures and feeder cattle futures are fractionally weaker.

  • Live cattle futures are slightly lower in continuing light trading.
  • Traders are expressing some disappointment over the steady cash prices being reported out of Texas and Kansas. Some cattle have traded at $119 in Texas and Kansas which is steady with the previous week. Traders continue to look for cash cattle and wholesale beef to trend higher as temperatures cool and retailers line up supplies for post-Labor Day featuring.
  • The August contract is seeing some light pressure as it holds a premium to the cash market.
  • Boxed beef trade continues to give mixed signals to traders with Choice boxes up slightly late yesterday and Select down slightly. Movement is seen as only moderate.
  • The weaker U.S. dollar index is providing some support for the cattle complex.
  • The short covering in grain futures has feeder cattle futures trading fractionally lower.

 

Lean hog futures are slightly higher in bull spreading.

  • Steady cash prices and positive signs from the wholesale pork market are lifting the front-month contract.
  • The pork cutout value rose yesterday and movement was solid at 341.8 loads. That has the front month on the rise.
  • But traders are reluctant to buy deferred futures higher as hog supplies and hog weights normally rise heading into fall while wholesale prices weaken seasonally.
  • August hogs are seeing some buying support from its discount to the cash index.
  • Negative chart formations in deferred futures also continue to limit buying interest in those contracts.
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