Market Snapshot, 10:00 a.m. CT -- (VIP) -- December 31, 2013

December 31, 2013 03:56 AM

Corn futures remain around a penny lower in most contracts.

  • Buying and selling interest are limited in the corn market ahead of year-end and trading volume is thin.
  • Bears have a slight edge as scattered showers took place in Argentina over the past 24 hours and more showers are in the near-term forecast. High temperatures are also expected, however.
  • Gulf basis softened a penny for January through March delivery this morning, signaling light demand that is typical of the holiday season.
  • Light pressure also stems from news UkrAgroConsult raised its 2013 corn production forecast for Ukraine by 500,000 MT to 26 MMT.
  • Strength in the U.S. dollar index on a larger-than-expected jump in consumer confidence in December is also encouraging some light profit-taking.

Soybean futures are 7 to 11 cents lower through the July contract, while deferred months are down 3 to 4 cents.

  • Recent rains are thought to have improved crop prospects in Argentina, which is pressuring the market as it brings South America's likely record-large crop to mind. However, high temps this week in Argentina will keep moisture needs high.
  • Funds are lightening their long exposure to the market ahead of year-end as demand from China and other nations will likely slow as South American supplies come available in the months ahead.
  • Gulf basis rose a penny for immediate delivery this morning, possibly signaling upcoming export demand news.
  • Strong demand for U.S. beans, while not enough to spur active buying interest, has helped to keep a floor under the market this month.

Wheat futures are enjoying gains around a penny across all three flavors.

  • Wheat is enjoying some mild short-covering this morning and funds lighten their short exposure to the market.
  • The market was encouraged that a 1-cent dip below the $6.00 mark for the SRW March wheat contract did not trigger a round of sell stops. This spurs some talk the market could be nearing a seasonal low.
  • However, buying interest remains limited to short-covering as the technical posture of the market remains decidedly bearish.
  • Plus, demand for U.S. wheat is generally lackluster as global wheat supplies are ample.
  • Traders are unconcerned about dryness on the Southern and Central Plains as the winter wheat crop entered dormancy in good condition. Winterkill concerns are also minimal.

Live cattle futures are posting steady to slightly higher this morning, while feeder cattle are narrowly mixed.

  • Live cattle futures continue to benefit from last week's record-setting cash cattle trade. Sales took place at $132 to $134 on the Southern Plains, while northern locations saw even higher prices up to $136.
  • The market is also benefiting from year-end positioning. The cattle market is expected to hit a delayed 10-year cycle high in 2014, adding to the positive tone.
  • Gains in the boxed beef market yesterday add support. Choice boxed beef values rose $2.72, again nearing the $200 per cwt. mark, and Select surged $4.16. The price gains slowed movement to 115 loads, however.
  • Feedlots will attempt to use beef price strength and unfavorable cold and snowy weather across the nation's northern tier as leverage for higher cash trade again this week.
  • But showlist estimates are up in all locations except Nebraska, where numbers are estimated steady with week-ago. Plus, packers continue to deal with negative margins.
  • Feeder cattle futures are mixed amid year-end positioning.

Lean hog futures are mixed this morning amid light trade.

  • Lean hog futures are seeing a mix of some mild short-covering and followthrough selling following yesterday's bearish reversal.
  • The cash and product markets have not yet given concrete signs they are working on a seasonal low, which means buying interest in futures remains minimal.
  • The cash hog index has ticked mildly higher the past two days. But it remains at a steep discount to nearby futures.
  • The pork cutout value did firm 25 cents yesterday, recouping a bit of Monday's price slide. Movement picked up to 381.51 loads, however.
  • Early cash hog bids range from 50 cents lower to $1 higher amid varied demand. Poor road conditions and subzero temps in the upper Midwest are limiting hog transportation.
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