Market Snapshot, 10:00 a.m. CT -- (VIP) -- August 6, 2013

August 6, 2013 05:01 AM
 

Corn futures are mostly 2 to cents lower in new-crop contracts, with September up 2 cents.

  • Front-month corn is slightly higher amid bull spreading, with new-crop futures under pressure due to non-threatening weather.
  • Adding to pressure is improvement in crop condition ratings. Our weighted Crop Condition Index shows the corn crop improved by 2.7 points from last week to 367.3 (0 to 500 being perfect).
  • If rains materialize as expected across the Corn Belt, traders will look for further improvement in next week's condition report.
  • December corn futures are pivoting around support at yesterday's low, with bears' next target $4.50.
  • Gulf corn basis is steady this morning for immediately delivery to stand 95 cents above September futures.

 

Soybean futures are 4 to 12 cents lower, with losses limited for nearby contracts.

  • New-crop soybean futures are mostly 10 to 12 cents lower this morning as traders view weather during the critical pod-filling month of August as nearly ideal.
  • Near-term weather forecasts call for below-normal temps to continue as well as waves of showers for the Midwest.
  • Our weighted Crop Condition Index shows the soybean crop improved by 2 points from last week to 362.87 (0 to 500 being perfect). Traders look for further slight improvement to be reflected in next week's report.
  • November soybean futures are testing support at yesterday's low of $11.70 1/2. Slipping below this level could trigger sell stops.
  • Traders are ignoring fresh demand news, as focus is on the crop. USDA announced a 110,000-MT soybean sale to China for 2013-14.
  • Gulf soybean basis is steady for immediate delivery to stand $1.70 over November futures, but has softened by 5 cents for early September delivery.

 

HRW and SRW wheat futures are marginally to 2 cents lower in most contracts, while HRS futures are mostly 2 cents higher.

  • SRW and HRW futures are seeing spillover pressure from corn, while HRS is seeing light short-covering support.
  • Additional pressure comes from news that Egypt purchased 60,000 MT of Romanian and 60,000 MT of Ukrainian wheat, although traders aren't surprised the U.S. didn't garner any of the business.
  • Additionally, export sources say the Iraqi grain board has purchased 150,000 MT of Australian and 50,000 MT of Canadian wheat.
  • HRS futures are being supported by a slight drop in crop condition ratings. Our weighted Crop Condition Index shows the spring wheat crop declined by nearly 3 points from last week to stand at 368.10 (0 to 500 being perfect).
  • Gulf SRW wheat basis has softened by a penny for immediate delivery to stand 57 cents over September futures.

 

Live cattle and feeder futures opened slightly higher in lackluster trade.

  • Live and feeder cattle futures have strayed too far from opening levels and are trading slightly higher amid prospects for tightening supplies.
  • But traders aren't willing to rebuild large long positions until there is confirmation the beef market has posted a near-term low.
  • This week's cattle showlist is nearly steady with last week, which puts more focus on watching the boxed beef market for direction for this week's cash trade.
  • Traders expect cash trade to at least be steady with last week, especially since packers' profit margins are in the black.
  • Meanwhile, feeder futures are widening the premium the nearby contract holds to the cash index.

 

Lean hog futures opened slightly higher on followthrough from yesterday's gains.

  • Following yesterday's sharp gains, nearby lean hog futures were vulnerable to profit-taking. But futures are seeing followthrough buying to improve the near-term technical outlook.
  • October lean hog futures gapped higher on the open, extended gains, but have slipped below the opening level.
  • Upside potential for August hogs is being limited by the mostly steady cash hog market, as the contract has returned in line with the cash index.
  • Traders will continue to keep a close eye on the pork cutout market after values firmed 56 cents yesterday, but demand was light.
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