Market Snapshot, 10:00 a.m. CT -- (VIP) -- December 19, 2013

December 19, 2013 04:09 AM

Corn futures are 2 to 4 cents higher on positive export news.

  • Corn futures are listing gains on positive export sales data and confirmation of additional sales to South Korea and unknown destinations.
  • However, gains in the U.S. dollar index are tempering gains.
  • USDA states weekly export corn sales reached 827,100 MT for 2013-14 and 45,200 MT for 2014-15 -- coming in above expectations.
  • USDA reported China was a buyer of 124,000 MT, including 180,000 MT switched from unknown destinations, 60,000 MT switched to South Korea and decreases of 4,700 MT. There were 245,500 MT of corn shipped to China the week ended Dec. 12.
  • USDA also announced export sales of 130,000 MT of corn to South Korea for 2013-14. A daily sale of 127,536 MT of corn was also announced to an unknown destination, with 111,280 MT for 2013-14 and 16,256 MT for 2014-15.
  • Buying had been dampened by news China had more corn shipments than thought. This morning's sales announcements suggests China still has strong import needs.
  • Gulf corn basis is down 2 to 4 cents for nearby delivery to stand 66 cents above March futures for December delivery.

Soybean futures are 5 to 7 cents lower in the front five contracts after opening higher.

  • Soybean futures opened firmer this morning on bargain buying after yesterday's selloff and spillover support from corn futures.
  • But strength in the U.S. dollar index and lackluster export sales data have turned futures lower.
  • USDA reports weekly soybean export sales were just 415,500 MT for 2013-14, which are a new marketing-year low. Sales of 80,200 MT were reported for 2014-15. Combined, sales were well below expectations.
  • The weekly report also states an unknown destination canceled 576,300 MT of 2013-14 soybean purchases. Traders believe this is China.
  • Also dampening buying interest is news China has reported another case of the H7N9 strain of bird flu in the Guangdong province, bringing the total number of cases to four since Sunday.
  • Gulf soybean basis is is down 1 cent for immediate delivery, suggesting a softening of demand ahead of the holidays.

Wheat futures are generally 4 to 6 cents stronger for all flavors of wheat on positive export news.

  • Wheat futures are higher on short covering following recent declines and somewhat positive export sale data.
  • However, the stronger U.S. dollar index is limiting gains as investors continue to react to yesterday's FOMC statement about tapering beginning in January.
  • The market got some positive news on the export front as USDA announced wheat sales of 656,100 MT for 2013-14 and 3,000 MT for 2014-15. There are well above expectations.
  • The better-than-expected export sales has traders thinking U.S. prices have dropped low enough to stimulate demand interest.
  • Gulf SRW wheat basis is steady for nearby deliver, but is down 5 cents for February and March delivery.

Live cattle futures and feeder cattle futures are slightly higher in early trading.

  • Cattle futures are slightly higher as traders even positions ahead of the release of USDA's Cattle on Feed Report tomorrow.
  • Traders expectations for Friday's Cattle on Feed Report are: On-Feed at 95.4%, Placements at 100.9% and Marketings at 94.6% of year-ago levels.
  • Some cash cattle have reportedly traded $1 to $2 lower in the Nebraska market, which has traders looking for prices to move lower from last week's $131 level when cash negotiations get going in earnest in the Southern Plains.
  • The wholesale beef trade edged lower yesterday afternoon, adding a further damper on buying interests.
  • USDA reported weekly U.S. beef sales totaled just 4,800 MT, mostly to Japan, compared with 10,100 MT in the previous week.
  • Feeder cattle futures are stronger on tight supplies.

Lean hog futures have been choppy, but are favoring a firmer tone.

  • Lean hog futures are marking time as traders even positions ahead of the holiday.
  • Fundamentals continue to be bearish as supplies continue to build and wholesale prices weaken. Cash hogs are steady to $1 weaker today.
  • But packers continue to cut in the black, which continue to temper declines in the cash market as packers want to keep kill lines running at capacity.
  • Yesterday afternoon's wholesale pork trade was negative, once again, with the cutout dropping $2.02 yesterday. But movement was strong at 427.76 loads.
  • February lean hogs continue to trade at a $6 premium to the cash hog index, which limits buying interest.
  • USDA's weekly export sales report shows U.S. pork sales at 9,700 MT, mostly to Mexico, compared with 5,300 MT in the previous week
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