Market Snapshot, 10:00 a.m. CT -- (VIP) -- September 30, 2013

September 30, 2013 05:04 AM


Corn futures have firmed to post gains between 5 and 7 cents.

  • Traders are favoring the upside as they ready positions for this morning's Quarterly Grain Stocks Report. Pre-report expectations are for USDA to peg Sept. 1 grain stocks around 688 million bu., which would be down 301 million bu. from year-ago.
  • Sharp weakness in the U.S. dollar index due to unease about a possible government shutdown is also giving bulls a slight advantage.
  • This morning's export inspections report will provide another read on how quickly lower prices are building U.S. export demand.
  • Expectations for USDA this afternoon to show harvest activity advanced to 15% over the past week -- the slowest pace in four years due to the late-start to the growing season. This will likely remain a damper on the corn market until half the crop is in the bin. Early yield reports have generally impressed.

Soybean futures are posting losses of 7 to 8 cents this morning.

  • Traders are reducing their long exposure in the bean market ahead of USDA's Quarterly Grain Stocks Report that is expected to set 2013-14 carry-in at a very tight 126 million bushels.
  • The market is also seeing some spread unwinding with the corn market to wrap up the month.
  • Thus far the market has remained within its recent consolidation pattern, but this could change if USDA delivers a grain stocks surprise.
  • Harvest pressure is also weighing on the bean market. Traders expect USDA data this afternoon to show harvest was 11% complete as of Sunday, this would be the slowest pace in four years.
  • While interior basis levels have softened, Gulf basis is holding steady this morning.

Wheat futures are around 4 to 5 cents higher in the SRW and HRW markets, while HRS wheat is 2 to 3 cents higher.

  • Traders are favoring the upside as the even positions for month-end as the market has finally woken up to strong wheat demand. This morning's export inspections report is expected to serve as another reminder of this.
  • Weakness in the U.S. dollar index is also supportive as it makes U.S. wheat exports even more competitive.
  • Traders are also readying for this morning's Quarterly Grain Stocks Report, which is expected to show all wheat stocks as of Sept. 1 at 1.938 billion bushels.
  • The Small Grains Summary is expected to peg all wheat production at 2.121 billion bu., which would be up 7 million bu. from year-ago.
  • Countering this is news Ukraine's ag ministry says the country has harvested 36.5 MMT of grain as of Sept. 30, which is up 11.6% from this time last year. Yields are also better than year-ago.

Live cattle futures are posting slight to moderate losses in early trade. Feeder cattle futures are moderately lower.

  • Cash cattle trade took place Friday at $126 on the Southern Plains -- up $2 from the week prior. Sales in northern locations took place at $2 to $4 higher prices. Tighter showlist estimates and strength in the futures market lifted the cash market.
  • But the front-month contract is already at nearly a $2 premium to these prices, encouraging light profit-taking to start the week.
  • The boxed beef market did show some resistance to historically high prices on Friday. Choice cuts fell 97 cents and Select slipped 90 cents. Movement slowed to 147 loads.
  • Traders will watch showlists and the product market before forming cash expectations this week. Trade in Texas last week was light.
  • Strength in the corn market is adding pressure to the feeder cattle market.

Lean hog futures gapped lower on the open and futures are posting moderate to sharp losses this morning with the December contract pacing losses.

  • Friday's Quarterly Hogs & Pigs (H&P) Report, which showed all categories on the bearish side of expectations, is weighing on the hog market to start the week.
  • But pressure on the front-month is being limited by the $4.50-plus discount it maintains to the cash hog index.
  • Early cash hog bids are steady as hog supplies are building and demand is varied. Packers continue to enjoy wide profit-margins.
  • Helping to limit pressure on some contracts is improvement in the product market. The pork cutout value firmed 8 cents on Friday though movement was lackluster at 291.07 loads.
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