Market Snapshot, 10:00 a.m. CT -- (VIP) -- August 7, 2013

August 7, 2013 04:57 AM
 

September corn futures are holding near steady, while new-crop contracts are mostly 1 to 3 cents higher.

  • Softer basis is limiting buying interest in the lead-month September contract despite it being oversold.
  • Mild corrective buying is being seen in new-crop contracts amid ideas the downside has been overdone. But buying interest is being limited by non-threatening weather.
  • Forecasts continue to call for normal to below-normal temps and normal to above-normal precip across the Corn Belt through at least mid-month. As a result, traders feel conditions are beneficial for the filling crop -- and for extremely late pollination in some areas.
  • Key today is whether there's enough sustained buying interest to maintain even mild corrective gains as attitudes are decidedly bearish.

 

August and September soybean futures are around 7 to 9 cents higher this morning. New-crop contracts opened the day session firmer, but have turned mostly lower.

  • Corrective buying amid ideas the downside has been overdone and tight supplies is supporting old-crop soybean futures.
  • Despite being oversold, new-crop soybeans are struggling to find buying interest as weather remains price-negative.
  • Traders continue to feel forecasts calling for normal to below-normal temps and normal to above-normal precip will benefit crop development. As a result, the upside is limited to mild short-covering.
  • USDA announced a daily soybean sale of 220,000 MT to China for 2013-14. That comes on the heels of a 110,000-MT new-crop sales to China yesterday. The pickup in Chinese demand signals prices have dropped to a "value" level.

S

RW, HRW and HRS wheat futures are roughly 5 to 8 cents lower this morning.

  • Wheat have extended overnight losses amid a lack of fresh supportive news and concerns about export demand.
  • While export demand has improved, the U.S. continues to miss out on some key purchases as U.S. prices are higher than the competition. And there's no shortage of wheat for export around the world.
  • Iraq's latest wheat tender resulted in the purchase of 100,000 MT of Australian wheat and 50,000 MT of Canadian supplies.
  • SRW and HRS futures are holding just above contract-low support. If that support is violated, it could trigger a wave of fresh chart-based selling.
  • Weakness in the U.S. dollar index is being brushed aside by traders thus far.

 

Live cattle futures are firmer in early trade this morning. Feeder cattle futures are mixed with a downside bias.

  • Live cattle futures are being supported by bullish cash cattle hopes as traders are still expecting steady to firmer prices compared with the $120 trade in the Plains last Friday.
  • While traders have bullish cash hopes, it's unlikely they will aggressively buy futures as they are still waiting on signs of a low in the boxed beef market.
  • Boxed beef prices were firmer Tuesday, but movement remains light, giving traders little confidence prices have dropped far enough to entice active retailer buying.
  • While boxed beef movement continues to disappoint, beef exports in June were the largest of the year in terms of volume and value, with Japan the lead buyer.
  • Feeder cattle futures are facing light profit-taking in most contracts amid corrective gains in corn. But strength in live cattle is limiting buying interest.

 

Lean hog futures are narrowly mixed this morning.

  • August lean hog futures continue to track the cash hog market as expiration is only one week away.
  • Fall- and winter-month lean hog futures are facing light profit-taking today after strong corrective gains over the past week. But the big discount these contracts still hold to the cash market is limiting selling interest.
  • Cash hog bids are steady to $1 higher across the Midwest today. Packers are working with strong margins, and are therefore looking to fill late-week slaughter runs.
  • Pork exports in June of 169,098 MT were up 2.4% from the previous month and were the highest tally of the year.
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