Market Snapshot, 10:00 a.m. CT -- (VIP) -- December 9, 2013

December 9, 2013 04:01 AM


Corn futures have traded on either side of unchanged this morning, but at present most contracts are around a penny lower.

  • Traders are favoring the upside as they ready positions for USDA's Supply & Demand Report tomorrow. Pre-report expectations are for USDA to trim its ending stockpiles estimate for 2013-14 by around 26 million bu. to 1.861 billion bushels.
  • However, this would still be up sharply from the previous marketing year.
  • Large speculators trimmed their net short position the week ended Dec. 3, signaling attention is shifting a bit more so from the supply to the demand side.
  • USDA's Weekly Export Inspections Report this morning will provide another update on demand.
  • Gulf basis ticked up a penny for February delivery and it held steady for other months, reflecting solid demand and limited farmer sales.

Soybean futures have backed off early highs, but the market is nevertheless seeing double-digit gains through the May contract, while deferreds are 2 to 7 cents higher.

  • Soybean futures surged on the open of daytime trade, trading up to or through last week's high. But this encouraged some light profit-taking.
  • The bean market is benefiting from reminders of strong Chinese demand.
  • According to official customs data, China imported 6.03 MMT of soybeans in November, up 43.9% from October. Year-to-date imports of 55.97 MMT are up 6.6% from year-ago.
  • Also, USDA this morning announced China purchased 290,000 MT of soybeans, 230,000 MT of which are for 2013-14 and 60,000 MT for 2014-15.
  • Traders are also readying for S&D Report, which is expected to show 2013-14 carryover around 154 million bu., which would be around a 16-million-bu. decrease from November but a 13-million bu. increase from 2012-13.
  • Gulf soybean basis firmed 5 cents for immediate delivery this morning, possibly signaling more export demand news lies ahead.

Wheat futures are mixed with most contracts of all three flavors favoring the downside.

  • Uncertainty as to near-term price direction is keeping the wheat market choppy this morning.
  • Gains in the soybean market and concern about winterkill in the central High Plains are helping to limit selling interest in the wheat market.
  • However, the posture of the market still fully favors market bears.
  • Traders are also unwilling to actively add positions ahead of tomorrow's Supply & Demand Report, which is expected to show a 12-million-bu. reduction in 2013-14 wheat carryover to 553 million bushels.
  • Steady to 1 cent higher Gulf basis for SRW wheat this morning signals solid demand.

Live and feeder cattle futures are posting slight gains in most contracts.

  • Traders are engaging in some light short-covering to start the week as the live cattle market sustained some technical chart damage last week.
  • Considering the fact December futures are now below last week's $132 cash cattle trade, traders feel some corrective short-covering is warranted.
  • The market is also benefiting from concerns about stressful frigid temps across the country that are stressing livestock and potential transportation disruptions.
  • On the other hand, packers are still dealing with negative profit margins, which deteriorated further last week.
  • The boxed beef market softened Friday and movement slowed. Weakness in the product market will cap buying interest in futures.

Lean hog futures are mixed with an upside bias.

  • Lean hog futures are seeing light short-covering as traders are uncertain whether last week's steep selloff was "enough" or if more downside is ahead.
  • Early cash hog bids are mixed as amid variable demand; some packers are in need of supplies to start the week while others bought ahead. Packers continue to enjoy wide profit margins.
  • Thus far, the weekend winter storm event is not having a big impact on Midwest hog transportation, though there is some concern about the impact on wholesale pork prices as the storm moves to the East Coast.
  • On Friday, the pork cutout value firmed 99 cents, but movement slowed to 312.87 loads.
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