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

October 15, 2013 05:01 AM
 

 

Corn futures have firmed to post gains around 4 cents.

  • Light short-covering is lifting the corn market this morning. But with harvest underway and the dollar seeing sharp gains, that is the extent of buying interest.
  • Rains moving across the Corn Belt yesterday and today are expected to keep farmers out of the field for a brief period. While official harvest progress reports remain lacking, a Reuters poll indicates analysts expect harvest was around 31% complete as of Sunday.
  • This signals harvest-related hedge pressure is still building.
  • Reports of better-than-expected yields add to the negative tone.
  • Also indicating new-crop supplies are becoming more readily available is a 1-cent slide in Gulf basis for November delivery.
  • Weekly export inspections data (one of the few export data sources still available) is expected to show exporters are taking advantage of the price break, with inspections expected to come in between 23 million and 31 million bushels.

Soybean futures are posting losses of 1 to 5 cents through the July contract, while farther deferred months are slightly higher.

  • Harvest-pressure continues to weigh on the bean market, though rains in the Corn Belt are pushing farmers out of the field to start the week.
  • A Reuters poll indicates analysts believe progress to be around 45% complete, which signals harvest-related hedge pressure should begin to fade soon.
  • Pressure also stems from reports favorable weather in Brazil is helping seeding to pick up.
  • Strength in the U.S. dollar index is also adding pressure to the soy complex.
  • USDA's Grain Inspection, Packers & Stockyards Administration (GIPSA) is expected to release weekly grain inspections data reflecting a surge in soybean inspections to between 27 million and 43 million bushels for the week ended Oct. 10.

Wheat futures of all three flavors are seeing losses around 2 to 5 cents.

  • Strength in the U.S. dollar index is encouraging profit-taking in the wheat market, as well as raising concerns about the competitiveness of U.S. wheat on the global market.
  • Nevertheless, export inspections for the week ended Oct. 10 are expected to come in between 27.5 million and 35 million bu., representing still-strong demand.
  • Helping to limit pressure are concerns about drought lowering production potential in China's top growing region.
  • In addition, Ukraine reportedly has seeded just 76% of its intended winter wheat area.
  • News India may cut its floor price for wheat exports by 13% to boost shipments adds light pressure.
  • Also, with corn harvest underway, wheat has not had support from the corn market to help it rally.
  • The market is ignoring reports some HRW wheat replanting may be necessary after heavy rains last week on the Southern Plains washed out some acres.

Live cattle futures opened under pressure, but this has since given way to short-covering and narrowly mixed trade. Feeder cattle futures remain moderately lower.

  • Both the live and feeder cattle markets are seeing some profit-taking today. Strength in the U.S. dollar index is encouraging to that end. In addition, both of these markets have recently seen strong gains, which is encouraging some technical selling pressure.
  • But downside risk is limited for live cattle as early indications are for higher cash cattle trade again this week compared with last week's $128 action on the Southern Plains.
  • While packers continue to deal with negative cutting margins, showlist estimates are down in Nebraska, Kansas and Texas this week.
  • Also, Urner Barry reports Choice and Select values surged to start the week.
  • Profit-taking and strength in the corn market are weighing on feeder cattle futures.

December lean hogs are leading the lean hog market in posting slight to moderate gains this morning.

  • December hogs surged on the open as traders worked to narrow the discount it held to the newly expired October contract, as the market still lacks a cash index with which to gauge futures.
  • As temps cool, lean hog supplies are expanding. But this is being met by rising slaughter demand, which is helping to keep the cash hog market mixed again today.
  • Packers are thought to be enjoying profitable margins.
  • Urner Barry reports the pork cutout value firmed around 10 cents yesterday.
  • Strength in the U.S. dollar index today is limiting buying interest in deferred months.
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