Market Snapshot, 10:00 a.m. CT -- (VIP) -- October 2, 2013

October 2, 2013 05:03 AM


Corn futures are seeing losses around a penny in most contracts.

  • The corn market is seeing light followthrough pressure this morning.
  • With harvest underway, technical chart damage and some private crop watchers raising their crop estimates, the corn market will likely continue to trend lower over the near-term.
  • INTL FC Stone raised its corn crop estimate to 14.150 billion bu. on a national average yield of 158.7 bu. per acre yesterday.
  • But Lanworth left its 2013-14 corn production unchanged today at 13.483 billion bu. today.
  • Selling is being limited by the forecast for rain in the Midwest Thursday through Saturday, possibly including snow in the central Dakotas. High winds are also possible.
  • Gulf corn basis is 2 cents firmer for immediate delivery to stand 64 cents over December futures, which suggests improved demand. Basis for November delivery, however, softened by a penny.
  • Ethanol production the week ended Sept. 27 rose 43,000 barrels per day (BPD) over the past week to 875,000 bpd. Ethanol stocks fell 104,000 barrels to 15.51 million barrels.

Soybean futures are 5 to 8 cents higher in early trade.

  • Corrective short-covering is lifting the bean market this morning. Weakness in the U.S. dollar index is also encouraging of this.
  • Gulf basis for immediate delivery improved 2 cents for immediate delivery this morning, possibly signaling more export demand news is ahead.
  • Traders are brushing off news INTL FC Stone raised its soybean crop forecast to 3.163 billion bu. on a national average yield of 41.4 bu. per acre.
  • Lanworth, meanwhile left its soybean production peg at 3.112 million bu. today.
  • The forecast for heavy rain in the Corn Belt Thursday through Saturday and the possibility of frost in the Dakotas and western Minnesota is providing underlying support.

Wheat futures have firmed to trade 3 to 6 cents higher for the SRW market, while the HRS and HRW wheat markets are 4 to 9 cents higher.

  • The wheat market continues to benefit from recent export data signaling U.S. wheat is once again competitive on the global market.
  • Traders continue to speculate Brazil will buy more U.S. wheat in the months ahead as dry weather in Argentina and recent frost events are thought to have trimmed the crop. Argentina has stopped exporting wheat to build domestic supplies.
  • Ongoing reports that the protein levels of spring wheat in Canada are below year-ago levels adds support to the HRS market.
  • Crop-watcher Lanworth raised its world wheat production by 2 MMT to 706 MMT today on expected production increases in Canada and Australia.
  • Weakness in the U.S. dollar index is positive for wheat futures this morning, as well as corrective buying in gold futures.

Live cattle futures are off to a mixed start with nearbys favoring the upside. Feeder cattle futures are enjoying slight gains.

  • Initial cash cattle bids at $123 are countered by asking prices of $127. Last week sales took place at $126 on the Southern Plains, which was up $2 from the week prior.
  • While showlists are tighter in all locations except Colorado this week, packers are working to improve negative cutting margins. At least steady trade is expected.
  • The government shutdown means boxed beef market data is not available to provide additional insight as to likely cash trade. However, Reuters reports private sources say wholesale beef prices have improved this week.
  • The market is also wary about what impact the furlough of government employees could have on demand for historically high-priced beef.
  • Feeder cattle futures are benefiting from weaker corn prices and tight calf supplies.

Lean hog futures are off to a stronger-than-expected start, with futures posting moderate gains.

  • Lean hog futures are enjoying some corrective bargain buying amid ideas the downside was overdone in reaction to USDA's bearish Hogs & Pigs Report. Also, some think the report failed to fully account for the impact of the porcine epidemic diarrhea virus (PEDV).
  • Light support also comes from the discount nearby contracts hold to the last reported level of the CME cash hog index.
  • Cash hog bids are expected to be steady to $1 lower again today as most plants are well supplied for this week's needs.
  • Otherwise, fresh news is lacking as the government shutdown halted the release of daily slaughter and pork cutout data. As a result, some traders are moving to the sidelines.
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