Market Snapshot, 10:00 a.m. CT -- (VIP) -- September 12, 2013

September 12, 2013 04:55 AM
 

Corn futures are 2 to 3 cents lower in all but the front-month, which is around a nickel higher. The September contract expires tomorrow.

  • Traders are squarely focused on evening positions ahead of USDA's reports today.
  • Pre-report expectations are for USDA to reduce its national average yield to 153.9 bu. per acre for a 13.646 billion bu. corn crop, which would be down 117 million bu. from August.
  • Traders expect USDA to trim 2013-14 carryover to 1.697 billion bu., down 140 million bu. last month.
  • World corn ending stocks for 2013-14 are expected to come in around 148.9 MMT, down 1.3 MMT from last month.
  • Weekly corn export sales of 332,600 MT for 2013-14 and a net sales reduction of 59,400 MT for 2012-13 fell short of expectations. But a total of 876,100 MT were carried over from the 2012-13 season.
  • Gulf basis ticked up a cent for October delivery and it held steady for other months this morning.

 

Soybean futures are posting losses around 13 to 18 cents this morning.

  • Traders are actively reducing risk exposure ahead of USDA's Crop Production and Supply & Demand Reports.
  • Expectations are generally friendly. Traders expect USDA to trim its national average yield expectation by 1.3 bu. to 41.3 bu. per acre for a 3.149 billion bu. bean crop. This would be down 106 million bu. from last month but up 134 million bu. from 2012.
  • Additionally, traders look for USDA to trim 2013-14 carryover to around 161 million bu., down from 220 million bu. last month.
  • Adding light pressure is disappointing soybean export sales of 478,100 MT for 2013-14 the week ended Sept. 5. A total of 928,500 MT were carried over from the previous marketing year.
  • Gulf basis plunged 5 to 10 cents for September delivery this morning, while basis fell 1 to 3 cents for other delivery months. This signals increased farmer selling as harvest picks up.

 

SRW wheat has softened to trade roughly 1 to 4 cents lower, with HRW and HRS narrowly mixed.

  • Wheat futures are following corn lower this morning as traders ready for the release of USDA's reports.
  • Pre-report expectations are for USDA to raise wheat carryover by around 5 million bu. from last month to 556 million bushels.
  • But corn data will likely be the trend setter for the wheat market.
  • This morning's Weekly Export Sales Report has spurred limited reaction as sales of 543,900 MT for 2013-14 and 8,000 MT for 2014-15 met expectations.
  • Selling is being limited by news Strategie Grains raised its peg of the EU's 2013-14 soft wheat harvest by 1.3 MMT to 135.5 MMT due to higher acreage.
  • Traders are also beginning to pay more attention to the weather in the Plains now that winter wheat planting is ramping up. Severe drought is well entrenched across western Kansas, although recent rains have provided some relief.

 

Live and feeder cattle futures are enjoying slight gains this morning.

  • A surge in beef movement yesterday is lifting futures this morning. The jump came on mixed prices.
  • This gives cash cattle expectations a slightly optimistic bent, though most still expect steady cash prices compared with last week's $123 action as showlist estimates are up this week.
  • Beef export demand also remains strong. Movement rose 1,000 MT from last week's strong tally to 18,900 MT.
  • Mostly weaker corn prices are encouraging light buying in feeder cattle futures, though interest is limited ahead of the release of USDA's reports.

 

Lean hog futures are narrowly mixed this morning.

  • Strength in the product and cash markets are encouraging some light buying interest, but recognition that the market is bucking a seasonal trend is limiting bullish enthusiasm.
  • The pork cutout value firmed $1.30 yesterday and movement surged to 446.3 loads.
  • And the cash hog market continues to trend steady to higher as recent Midwest heat has tightened near-term supplies.
  • At this time of year, prices typically soften as supplies build into fall. Expectations for the market to eventually transition back to this more seasonal pattern is encouraging light profit-taking.
  • Pork export sales rose 2,700 MT to 7,300 MT the week ended Sept. 5.
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