Market Snapshot, 10:00 a.m. CT -- (VIP) -- November 8, 2013

November 8, 2013 03:54 AM
 

Corn futures are fractionally to 1 cent lower ahead of the release of USDA data.

  • Corn futures are slightly weaker ahead of the release of today's USDA reports on strength in the U.S. dollar index.
  • The dollar is stronger as traders react to today's jobs report which shows more jobs created in October than expected, which has traders pricing in the start of tapering by the Federal Reserve.
  • The big news today is the release of the USDA's Crop Production and Supply & Demand Reports. Traders anticipate USDA will raise the size of the crop to around 14.022 billion bu. and carryover to above 2 billion bushels.
  • Harvest is ramping up after a brief delay due to rain and snow earlier this week, but traders view harvest as winding down and do not expect a new wave of harvest-related hedge pressure.
  • Meanwhile, the recent wave of large export purchases indicates cash prices have fallen low enough to start the long process of rebuilding demand.
  • Brazil's Conab has raised its estimate of the country's 2013-14 corn crop to a range of 78.5 MMT to 79.8 MMT, up from it's previous forecast of 78.4 MMT to 79.6 MMT.

Soybean futures are 1 to 4 cents higher ahead of the USDA reports.

  • Position evening ahead of this morning's crop reports dominates trading this morning, shrugging off the stronger U.S. dollar index.
  • Traders look for USDA to raise the size of the crop to around 3.225 billion bu. and carryover to 183 million bushels.
  • According to official customs data, China imported 4.19 MMT of soybeans last month, down 11% from the previous month. Year-to-date imports of 49.9 MMT are up 3.3% from year-ago.
  • Meanwhile, Conab has raised its Brazilian bean crop estimate to a record 87.9 MMT to 90.2 MMT. Last month the agency pegged the crop between 87.6 MMT and 89.7 MMT.
  • Meanwhile this mornings upswing Gulf soybean basis continues to suggest demand is strong.

SRW and HRS wheat are mixed, with HRW ahead of USDA data.

  • All wheat flavors are favoring a firmer tone, but SRW and HRS have turned mixed.
  • Traders are focused on position evening ahead of the release of the USDA reports this morning.
  • Traders look for USDA to trim wheat carryover to around 527 million bu. in this morning's reports.
  • Strength in the U.S. dollar index is limiting buying, as it raises concerns about export demand.
  • The U.S. dollar index is stronger on this morning's monthly employment report which showed 204,000 nonfarm payrolls were added in October, coming in above expectations.
  • Gulf SRW wheat basis was unchanged in early morning trading..

Live cattle futures are slightly to moderately higher. Feeder cattle futures are moderately higher.

  • Live cattle futures are higher amid tightening supplies.
  • Traders had looked for a lower opening on the weaker cash cattle trade in Kansas yesterday and lower wholesale trade.
  • Cash cattle trade got underway yesterday at $131, which is $1 below the bulk of last week's trade.
  • December live cattle are currently trading about a $1.50 premium to that cash price, which signals attitudes remain bullish.
  • Traders are shrugging the decline in wholesale beef prices posted yesterday.
  • Feeder cattle futures are moderately higher on profit-taking and expectations of tightening supplies this winter.

Lean hog futures are slightly higher amid position squaring.

  • Lean hog futures gapped higher on short-covering.
  • Futures have posted sharp losses recently and charts remain negative, however.
  • Fundamental remain negative as hog runs and average weights build.
  • But the wholesale demand continues to hold up. Pork cutout values improved $1.05 yesterday and movement is viewed as positive.
  • Packer profit margins remain positive and cash hog prices are steady as a result. But gains in the cash market are limited amid more abundant market-ready supplies.
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