Market Snapshot, 10:00 a.m. CT -- (VIP) -- July 15, 2013

August 15, 2013 05:06 AM
 

Corn futures are up 14 to 17 cents this morning, extending overnight gains.

  • This morning's Prevent Plant data, expanding drought and improved export demand are encouraging funds to lighten their large short position today.
  • Initial Farm Service Agency data shows corn prevented planting acreage at 3.411 million, with big declines coming in North Dakota, Iowa and Minnesota.
  • Meanwhile, this morning's National Drought Monitor shows drought has spread across Iowa and into central Illinois. This heightens concerns about warmer temps in the forecast for the upper Midwest next week and below-normal precip chances for the western Corn Belt.
  • Also, the Climate Prediction Center's 90-day outlook calls for the above-normal precip for the central and eastern Corn belt.
  • This morning's Weekly Export Sales Report impressed as a net sales reduction of 59,100 MT for 2012-13 were more than offset by sales of 836,100 MT for 2013-13.
  • A 3-cent rise in Gulf basis this morning signals more demand news may be ahead.

Soybean futures are posting gains in the teens this morning.

  • Soybeans are benefiting from increasing crop concerns and signs demand is improving.
  • Today's Weekly Export Sales Report showed a net soybean sales reductions of 10,500 MT for 2012-13, but these were more than offset by impressive sales of 1,893,400 MT for 2013-14, with China accounting for most of the business.
  • Weather concerns are also moving back into focus as the crop is beginning to set and fill pods. With dryness building in the central and western Corn Belt, the dry forecast for next week in these areas is concerning. Heat is also expected to build across the upper Midwest next week.
  • Also shifting some attention back to growing conditions is the initial release of Farm Service Agency data, which showed soybean prevented plant acres at 1.619 million.

 

 

Wheat futures are roughly 5 to 9 cents higher this morning.

  • Wheat futures are enjoying spillover support from corn and soybeans this morning.
  • But a disappointing Weekly Export Sales Report is tempering buying enthusiasm. Sales of 490,100 MT for 2013-14 and 5,500 MT for 2014-15 fell short of expectations. This fuels ideas the U.S. is losing out on business to the Black Sea region.
  • Strategie Grain raised its estimate of the 2013-14 European Union soft wheat harvest by 0.8 MMT to 134.2 MMT.
  • Countering this news planted wheat area in England fell to its lowest level in three decades.
  • Heavy stock market losses are also a negative factor.

 

Live cattle futures off to a very choppy start with most contracts currently favoring the downside. Feeder cattle futures are facing light to moderate pressure.

  • Live cattle futures are facing light profit-taking today after their recent rally.
  • Outside markets are also encouraging selling, as the stock market is under pressure after positive jobs data spurred thoughts the Fed may begin to taper its bond buying program.
  • Meanwhile, the cash cattle standoff continues. While packers are keeping bids below last week's levels for the time being, most expect firmer cash trade compared with last week's $121 action on the Southern Plains.
  • The beef market has improved this week and showlist estimates are down.
  • Yesterday, Choice and Select values posted strong gains and movement was strong.
  • Weekly beef export sales of 12,700 MT improved from the week prior and exports of 16,100 MT were a marketing year high.
  • Strength in the corn market is encouraging profit-taking in feeder cattle futures.

 

Lean hog futures are posting slight to moderate losses this morning.

  • Lean hogs are seeing some profit-taking today after strong gains this week. Negative outside markets are also encouraging of this.
  • Also, the pork cutout value slipped 54 cents yesterday, though movement picked up to 482.4 loads. This is a reminder that the product and cash market will likely fall once Labor Day buying wraps up as supplies are building seasonally.
  • Weekly pork exports sales of 8,500 MT rose 3,700 MT over the week prior and exports of 12,400 MT were a marketing year high.
  • Cash hog bids are steady to lower today as packers are well supplied for near-term needs and supplies are on the rise.
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