Market Snapshot, 10:00 a.m. CT -- (VIP) -- November 22, 2013

November 22, 2013 04:00 AM

Corn futures are 1 to 2 cents weaker after edging higher in the overnight session.

  • Corn futures opened slightly higher on short covering but have slipped into negative territory on spread-trade activity with soybeans.
  • A weaker U.S. dollar index originally lifted futures but traders are ignoring that weakness as they return their focus to the buildup in U.S. carryover supplies.
  • Traders are becoming accustomed to reports of very strong weekly export sales reports, believing large exports are to be expected due to the slump in prices and surge in available supplies.
  • Gulf corn basis is 1 to 2 cents softer for delivery the remainder of 2013. This could be a sign of softening demand, but it is more likely a reflection of increasing available supplies.

Soybean futures are 5 to 19 cents higher, with nearbys leading gains.

  • Soybean futures are higher on a new round of positive news from China and lack of farmer selling.
  • In addition, spread traders are favoring soybeans over corn, providing additional lift to nearby contracts.
  • The market is getting a lift from news China's Ministry of Commerce has raised its soybean import forecast for November by 220,000 MT to 6.17 MMT. But it sees December imports falling to 3.85 MMT.
  • In addition, USDA this morning announced China purchased 115,000 MT of soybeans for 2013-14.
  • Technical traders are looking for positive follow-through with January beans trading above the key psychological $13.00 level.
  • Gulf soybean basis is steady this morning to stand 91 cents over January futures for immediate delivery.

Wheat futures are 1 to 4 cents higher with SRW up 2 to 3 cents, HRW up 2 to 4 cents and HRS up fractionally to 2 cents in the front three contracts.

  • Wheat futures are higher on short-covering prompted by weakness in the U.S. dollar index and concerns of crop prospects in Western Australia.
  • Positive economic news out of Germany has resulted in sharp weakness on the U.S. dollar index this morning, which is providing light support in wheat futures.
  • Futures are seeing support by news of late-season crop problems in Western Australia.
  • But weakness in the corn market is limiting buying in wheat.
  • Gulf SRW wheat basis is 5 to 10 cents higher for delivery the remainder of the year. Basis for immediate delivery stands $1.00 over December futures.

Live cattle futures are fractionally mixed on position evening and feeder cattle futures are slightly higher.

  • Position evening and light trading dominate trading ahead of the release of USDA Cattle on Feed Report this afternoon.
  • Cash trading began yesterday at $131 in the Southern Plains, which is $1 lower from a week earlier. December futures have fully factored in that price and are trading at a slight premium to the cash trade.
  • Traders continue to prepare for this afternoon's Cattle on Feed Report, which is expected to show On Feed at 94.2%, Placements at 110% and Marketings at 101.5% of year-ago levels.
  • The Cold Storage Report will also be released this afternoon. Traders is expect it to show a 1% rise in frozen beef stocks at the end of October versus the previous month.
  • The boxed beef market continues to post lower prices. Choice values slipped 76 cents yesterday and Select declined 87 cents. Movement, however, is a positive 217 loads.

Lean hog futures are slightly weaker amid position squaring.

  • Lean hog futures are favoring the negative side of unchanged as supplies remain large and kill will be reduced next week due to the Thanksgiving holiday.
  • Supporting futures is continued strong pork movement and positive cutting margins for packers.
  • Pork values firmed 6 cents yesterday afternoon after dropping sharply this week. Movement remained strong at more than 400 loads.
  • The cash hog market is steady to $1 lower amid ample supplies.
  • Traders are also readying for this afternoon's Cold Storage Report, which is expected to show frozen pork stocks at the end of October to total 565.1 million lbs., down very modestly from the previous month but 6.3% lower than year-ago.
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