Market Snapshot, 10:00 a.m. CT -- (VIP) -- December 12, 2013

December 12, 2013 03:58 AM
 

Corn futures have softened to trade between 6 and 7 cents lower in most contracts.

  • Strength in the U.S. dollar index this morning is giving market participants more incentive to book profits after yesterday's gains. Spillover from soybeans adds pressure.
  • Traders are ignoring reminders of rebuilding demand today and are instead focusing on ample U.S. corn supplies.
  • Corn export sales of 695,400 MT for 2013-14 and 109,400 MT for 2014-15 the week ended Dec. 5 came in slightly above expectations.
  • USDA also announced an 120,000-MT corn sale to unknown destinations for 2013-14 delivery this morning.
  • Gulf basis is 1 to 2 cents higher for January and February shipment this morning, signaling more demand news may be on the horizon.

Soybean futures have softened to post double-digit losses through the November contract, with the front-month 22 cents lower.

  • Soybean bulls have grown weary of bucking the downtrend in the corn and wheat markets. Therefore, traders are booking profits in the bean market today. Dollar strength adds incentive for traders to do so.
  • Early pressure triggered some technical sales. Key will be if nearby contracts respect key psychological support at $13.00.
  • The selloff comes despite impressive weekly export sales of roughly 1.109 MMT for 2013-14 and 413,900 MT for 2014-15.
  • Gulf basis slipped a penny for immediate delivery this morning, signaling recent gains encouraged some farmer sales.
  • Deferred futures are being pressured by the outlook for a record South American crop, as well as expectations for higher acreage for the 2014 U.S. bean crop.

SRW wheat is 3 to 9 cents lower this morning, while HRW wheat is posting losses mostly around 10 to 11 cents. The HRS market is seeing losses around 3 to 4 cents.

  • Gains in the U.S. dollar index along with spillover from the corn and soybean markets are pressuring wheat futures today. A number of contracts have posted new contract lows.
  • A reminder of tepid demand for U.S. wheat due to noncompetitive shipping costs adds to the negative tone.
  • This morning's weekly export sales showed sales of 372,200 MT for 2013-14, which met lackluster expectations.
  • There is uncertainty about how far prices must dip for U.S. wheat to attract export business. Japan did buy 78,912 MT of U.S. wheat in its weekly tender.
  • Warmer temps moving into the Plains have also eroded concerns about winterkill damage. Such concerns were never major, however, as much of the crop has protective snowcover.

Live cattle futures are slightly higher through the June contract, with deferred months mixed. Feeder cattle futures are moderately higher.

  • Live cattle futures are favoring the upside as traders await the start of cash cattle trade.
  • Initial bids are at $129, which compares to last week's trade at $132. Expectations are for sales to take place at steady to lower prices this week.
  • Showlist estimates are up at most locations this week and the boxed beef market has delivered a mixed performance.
  • Yesterday Choice boxed beef values firmed 49 cents and Select softened by 91 cents. The mixed price action did spur impressive movement of 236 loads, however.
  • Warmer temps are moving into the Plains, easing concerns about livestock stress. However, cold temps the first half of the week likely slowed animal weight gain.
  • Weekly beef export sales of 10,100 MT were decent but down 1,600 MT from the week prior.
  • Softer corn prices are boosting the feeder cattle market today.

Lean hog futures are posting slight gains this morning.

  • Lean hog futures are enjoying some light short-covering this morning as traders view the market's recent selloff as overdone.
  • Also encouraging corrective trade is a surge in pork movement yesterday on a 60-cent decline in the pork cutout value. This eases concern about the product market's ability to keep up with expanding hog supplies.
  • High carcass weights and building hog numbers continue to weigh on the cash hog market. Early cash hog bids are mostly steady.
  • Packers are still in enjoying wide profit margins, which is giving them incentive to keep kill lines full and preventing supplies from backing up.
  • The cash hog index is trading in line with the December contract, limiting both buying and selling interest ahead of its expiration tomorrow. But the February contract still holds a sizable premium to the index.
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