Market Snapshot, 10:00 a.m. CT -- (VIP) -- December 20, 2013

December 20, 2013 04:00 AM

Corn futures are fractionally to 1 cent higher on position squaring ahead of the weekend and the holiday week.

  • Corn futures are posting small gains as traders square positions ahead of the weekend and expected thin holiday trading next week.
  • A slight setback in the U.S. dollar index is supporting this morning's slight gains.
  • Traders continue to fret over China's recent rejections of U.S. corn shipments because they contained material from a GMO corn variety that has yet to be approved by that government. Chinese quarantine officials say so far, 545,000 MT of U.S. have been rejected, a figure in line with reports we published earlier this week.
  • However, China was listed as a buyer of U.S. corn this week.
  • The market is getting a lift on news from USDA that private exporters sold 180,000 MT of corn for delivery to Japan during the 2014-15 marketing year.
  • Technical traders note March futures have moved through resistance at $4.30 and are marketing day five of successive higher highs and higher lows.
  • Traders continue to watch for signs funds will lighten their heavy net short position.
  • Gulf corn basis is unchanged for immediate delivery, 1 cent lower for January and February delivery and steady for other delivery periods.

Soybean futures are 9 to 17 cents higher in 2013-crop contracts; September 2014 and later contracts are 5 to 9 cents higher.

  • Soybean futures have moved to the plus side on position squaring ahead of the weekend.
  • The slight correction in the U.S. dollar index is providing additional support.
  • However, traders continue to worry that Chinese buying interest will soon shift to South America as a record crop is expected from the region. Those worries temper gains.
  • Technical traders are taking heart in today's bounce as it adds weight to the $13.20 area as an important support zone. But resistance rests just above the market at $13.53 1/2. A surge above that resistance would break the recent sideways trading range and possibly trigger followthrough buying.
  • Gulf soybean basis is steady in early morning trading.

Wheat futures are generally 2 to 5 cents higher on pre-weekend position evening.

  • Short-covering is dominating trading this morning after futures posted a new round of contract lows in the overnight trade.
  • A slight setback in the U.S. dollar index is helping to lift gains.
  • Traders continue to see some positive signs in yesterday's surge in export sales as reported by USDA. The upswing in sales has traders thinking U.S. wheat prices have fallen far enough to become competitive again on the global market. Swings in the value of the U.S. dollar index will be key going forward.
  • Gulf SRW wheat basis is stronger this morning signaling more export business may be in the works. Basis is 5 cents higher for December delivery, 4 cents stronger for January delivery, 7 cents higher for February delivery and steady for later delivery periods.

Live cattle futures and feeder cattle futures are slightly higher in pre-report trading.

  • Cattle futures are slightly higher are traders continue to even positions ahead of USDA's Cattle on Feed (COF) Report due out this afternoon.
  • Traders expect the report to show On-Feed at 95.4%, Placements at 100.9% and Marketings at 94.6% of year-ago levels.
  • The cash cattle market saw trade pick up at $130 in the Southern Plains, which is down $1 from a week earlier.
  • Choice beef slipped 47 cents yesterday and Select rose 40 cents. Movement was light yesterday at 107 loads.
  • Traders are also encouraged about progress made with restarting beef trade with China, although final agreement isn't expected until next summer.
  • Feeder cattle futures are slightly higher on the gains in live cattle futures and position evening ahead of this afternoon's COF report.

Lean hog futures are slightly weaker on continue weak wholesale pork prices.

  • Lean hog futures are slightly weaker on continuing weakness in the wholesale pork trade.
  • Pork cutout values added to this week's losses by softening $2.58 yesterday. Movement was strong, however, at 422.98 loads.
  • Cash hogs are down sharply losing $1 to $2 as the market adjusts to holiday-shortened schedules the next two weeks.
  • The $5-plus premium held by February futures versus the cash hog index is seen limiting buying interest.
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