Market Snapshot, 10:00 a.m. CT -- (VIP) -- October 18, 2013

October 18, 2013 05:02 AM
 

 

Corn futures saw pressure on the open, but this has since given way to bargain buying. Most contracts are around 2 cents higher.

  • Short-covering ahead of the weekend is lifting the corn market. The market continues to await official confirmation of large Chinese corn purchases.
  • USDA will release the Weekly Export Sales Report at 2 p.m. CT today for the week ended Sept. 26, according to Reuters. The department has not yet announced when data for the other missed weeks will be released.
  • Harvest-related hedge pressure continues to weigh on the market as corn harvest is not thought to be nearing the halfway complete point. The market may receive an update on progress Monday.
  • Only minor harvest delays are expected over the next two weeks as scattered showers are expected to be light.
  • Basis for corn at interior locations is softening, signaling harvest efforts have picked up the latter half of the week and that more farmers are marketing their crop. Gulf basis was steady to a penny lower today, also signaling the availability of 2013 crop supplies.

Soybean futures saw gains overnight, but the market has since softened to trade 1 to 3 cents lower.

  • Early gains gave way to profit-taking as the market was disappointed it has yet to have "large" soybean buys during the government shutdown confirmed. USDA will reportedly release export sales data for the week ended Sept. 26 at 2:00 p.m. CT today, but it has not yet said when subsequent data will be released.
  • USDA did announce daily export sales of 222,000 MT of U.S. beans to China and 140,000 MT to unknown destinations, both of which are for 2013-14 delivery.
  • Pressure is being limited by the improved technical posture of the market as well as ideas the bulk of harvest-related hedge pressure is behind the market.
  • Basis levels at interior locations are holding steady for the most part as new supplies are being met with strong demand.

Wheat futures are seeing gains in the teens through at least the May contract for all three flavors.

  • Ideas the wheat market could soon receive export demand news that has been lacking since the government shutdown is supporting the wheat market. Traders are hopeful USDA's export sales data for the week ended Sept. 26 to be released this afternoon will reflect strong demand.
  • Also, yesterday's steep slide in the U.S. dollar index should make U.S. wheat prices more competitive going forward.
  • Futures were supported overnight by news the Argentine ag ministry pegs its 2013-14 wheat crop at 8.8 MMT, which is lower than most private estimates. The country has been dealing with both frost and dryness in recent weeks.
  • SovEcon today said Russia will likely cut its grain exports in October to between 2.6 MMT and 2.7 MMT as the country is facing tougher competition. The country exported 3.53 MMT in August and 2.93 MMT of grain in September.
  • Slight gains in the corn market are also making it easier for wheat to rally.
  • The market is brushing off news Israeli group bought 25,000 MT in feed wheat that was likely of Black Sea Origin.

Live cattle futures are off to a slightly higher start. Feeder cattle futures are mixed.

  • Corrective short-covering on ideas the downside was overdone yesterday are lifting live cattle futures.
  • The market retreated yesterday following news of $1 to $2 higher cash cattle trade at $129 to $130 as traders felt a top was near or in place. Some additional sales are possible today.
  • Buying following yesterday's bearish reversal in some contracts diminishes the negative impact of the chart pattern.
  • Also adding incentive to cover short positions are expectations for supplies to tighten going forward. But the market will now have to wait until month's end for the Cattle on Feed Report's supply update. It was originally scheduled to be released this afternoon.
  • Yesterday, USDA reported Choice boxed beef prices stand at $196.03 while Select is at $181.72. This compares to prices of $193.25 and $177.61 for Choice and Select cuts on Sept. 30 (the last available official data).
  • Feeder cattle are seeing light followthrough selling today.

Lean hog futures are seeing light followthrough pressure today.

  • After yesterday's poor finish, traders are favoring the downside as the ready positions for the weekend. The market is also reducing some risk exposure as traders work to get a handle on official hog market data now that the government is reopened.
  • The cash hog market is expected to be steady to lower today following mixed bids earlier this week. Updated data shows packers have seen profit margins decline. The market has not yet received an update the CME cash hog index.
  • While slaughter runs are picking up, they are still below year-ago levels. Hog supplies are also expanding seasonally.
  • Yesterday USDA report the pork cutout value stands at $95.26, which compares to the last reported price of $101.47 on Sept. 30. This was around $4 higher than private data sources like Urner Barry had indicated. Movement was impressive at 554.8 loads.
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