Market Snapshot, 10:00 a.m. CT -- (VIP) -- November 12, 2013

November 12, 2013 04:00 AM

Corn futures are highly choppy this morning; 1 to 2 cents lower.

  • Traders have oscillated between profit-taking and short-covering this morning.
  • The market still has Friday's smaller-than-expected crop peg on their minds, though USDA is still forecasting record-large production.
  • Traders are also readying for the export inspections report, which in recent weeks has shown rebuilding corn demand.
  • Cold temps and snow in the Corn Belt are not overly concerning; traders expect USDA this afternoon to report corn harvest was around 84% complete as of Sunday.

Soybean futures have extended early gains to trade mostly double-digit higher.

  • Confirmation of strong demand for U.S. soybeans is encouraging more short-covering in the bean market today.
  • China's Ministry of Commerce has more than doubled its November soybean import forecast to 5.95 MMT. However, it also lowered its October forecast by 680,000 MT to 4.53 MMT.
  • USDA this morning announced China purchased 116,000 MT of soybeans and an unknown buyer purchased 35,000 MT of soyoil -- all for 2013-14 delivery.
  • Steady to 1 cent higher Gulf basis this morning signals more demand news may lie ahead.
  • Traders also expect this morning's export inspections report to reflect strong demand, with pre-report expectations ranging from 63 million bu. to 90 million bushels.
  • The market is also seeing some technical-based buying after nearby contracts moved and closed above the psychological $13.00 level.
  • Traders expect USDA to report soybean harvest was 94% complete as of Nov. 10 in this afternoon's update.

SRW and HRW wheat futures are split with nearbys slightly higher and deferreds slightly lower. HRS wheat is around a penny higher.

  • Wheat futures are enjoying tentative short-covering this morning. The U.S. dollar index has backed well off its early gains, which is encouraging to that end.
  • But with the corn market under pressure, buying interest outside of positioning is limited.
  • Plus, concerns linger that U.S. wheat prices are no longer competitive. This is expected to be reflected in this morning's weekly export inspections numbers.
  • A recent surge in corn demand adds to such ideas.
  • USDA's crop condition data this afternoon is expected to confirm the U.S. winter wheat crop is off to a favorable start.

Live cattle futures are narrowly mixed, while feeder cattle are slightly to moderately higher.

  • Bulls had the initial advantage in the live cattle market, which helped some contracts to gap higher on the upside. But some light profit-taking has since followed.
  • Traders are awaiting boxed beef market updates before forming cash opinions this week.
  • December live cattle are at nearly a $2 premium to last week's cash action, which is limiting buying interest.
  • Showlists are slightly heavier everywhere except Texas this week and packers are still dealing with negative cutting margins. This could make it tough for feedlots to get better than steady prices for cattle.
  • But on the other hand, boxed beef prices are historically high and supplies are still tight as a whole.
  • Cattle slaughter is projected at 121,000 head today, which is steady with week ago, but down 8,000 head from year-ago.
  • A pullback in the corn market returned buying interest to feeder cattle futures.

Lean hog futures are narrowly mixed this morning.

  • While hog weights are on the rise as temperatures cool and seasonal cycles mean hog numbers are also building, wide profit margins are giving packers incentive to keep kill lines full.
  • Hog slaughter today is projected at 436,000 head, up 3,000 head from last week and around 1,500 head above year-ago.
  • Plus, the market remains concerned about the impact of the porcine epidemic diarrhea virus (PEDV) on hog numbers going forward.
  • Early cash hog bids are mostly steady as most plants are well supplied for near-term needs.
  • The $2 premium nearby contracts hold to the cash hog index is limiting buying enthusiasm.
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