Market Snapshot, 10:00 a.m. CT -- (VIP) -- October 28, 2013

October 28, 2013 04:54 AM


Corn futures are mostly 7 to 8 cents lower this morning.

  • Spillover pressure from the bean market is weighing on corn to start the week. Strength in the U.S. dollar index adds pressure.
  • As a result, traders are paying little attention to USDA's announcement that an unknown destination bought 103,600 MT of corn for 2013-14 delivery.
  • Gulf basis firmed 3 to 4 cents for October and November delivery this morning, signaling some bargain buying is occurring among exporters.
  • A Reuters poll of analysts shows they expect USDA to report corn harvest was 52% complete as of Sunday. This would indicate the bulk of hedge pressure is behind the market.

Soybean futures are posting losses in the teens to 20s in most contracts, with November leading the slide.

  • Profit-taking is weighing heavily on the bean market to start the week. Strength in the U.S. dollar index is encouraging of this.
  • As nearby contracts dipped below the psychological $13.00 support level, sell stops were triggered.
  • China's Ministry of Commerce has lowered its soybean import forecast for the month by 640,000 MT to 5.21 MMT. While up from last month, the reduction added to weakness in futures overnight. That would still be up 10.9% from the 4.7 MMT of soybean imports in September.
  • A Reuters poll indicates analysts expect USDA to report harvest was 78% complete as of Sunday.
  • Traders are ignoring USDA's announcement of a 115,000-MT soybean sale to China and 115,000-MT sale to unknown destinations, all for 2013-14 delivery.
  • Gulf basis is mixed this morning, with October up 2 cents and November and December delivery a penny weaker.

Wheat futures are around 7 to 9 cents lower in the SRW market, while HRW and HRS wheat are seeing slightly lighter losses.

  • Spillover pressure from corn and especially soybeans are weighing on the wheat market. A firmer U.S. dollar index adds pressure.
  • The market also expects to be reminded of the favorable start to the winter wheat growing season in this afternoon's Crop Progress and Condition Report.
  • Wheat needs a dose of fresh demand news to keep bulls interested.
  • Gulf SRW basis is steady for October delivery but 9 cents firmer for November delivery to suggest demand news is on the horizon.
  • The release of weekly export inspections data at 10:00 a.m. CT will provide another read on demand.

Live and feeder cattle futures are off to a slightly to moderately higher start.

  • Live cattle futures continue to benefit from last week's record-setting $132 to $134 cash cattle trade. Nearby futures are in line with these prices.
  • Tighter showlists and beef market strength spurred these impressive prices.
  • But on Friday, the boxed beef market set back, with Choice cuts down 10 cents and Select 28 cents softer. Movement slowed to 131 loads. This raises concern about resistance to lofty beef prices.
  • And with packers seeing deeply negative cutting margins, the boxed beef market will need to strengthen this week if the trend of higher cash prices is to continue.
  • Weaker corn prices are lifting feeder cattle futures.

Lean hog futures are narrowly mixed in early trade.

  • Traders are evening positions to start the week as they attempt to gauge how much upside is left for the hog market.
  • The technical posture of the market is bullish and the front-month contract remains at a discount to the cash hog index.
  • But supplies are building seasonally, so packers are bidding steady to lower prices for cash hogs despite strong profit margins.
  • Traders remain optimistic lofty beef prices will cause some consumers to purchase more pork. But on Friday the pork cutout value fell 78 cents and movement was unimpressive.
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