Market Snapshot, 10:00 am CT (VIP) -- December 11, 2013

December 11, 2013 04:14 AM
 

Corn futures have seen choppy trade this morning. Most contracts are currently 1 to 2 cents higher.

  • The corn market has seen choppy trade as the market continues to sort through yesterday's Supply & Demand Report, though futures are currently favoring the upside. USDA trimmed its carryover estimate for 2013-14 more than expected to 1.792 billion bu., but that's still more than double last year's figure.
  • Buying interest is being limited by news China rejected another 59,100 MT cargo of U.S. corn due to the presence of MIR 162 (Syngenta's Agrisure Viptera). Traders anticipate more rejections going forward as the country has more domestic corn on hand than earlier thought, according to China National Grain and Oils Information Center (CNGOIC).
  • But these rejections are being snapped up by other Asian countries, in some cases at discounted prices.
  • Countering this is USDA's announcement this morning that an unknown buyer purchased 120,000 MT of corn for 2013-14.
  • Gulf basis firmed 2 cents for immediate delivery this morning, possibly signaling more export demand news is ahead.
  • Also signaling strong demand, ethanol production rose 31,000 barrels per day (bpd) the week ended Dec. 6, to 944,000 bpd. Weekly ethanol stocks rose 324,000 barrels to 15.45 million barrels.

 

Soybean futures have firmed after a choppy start to trade steady to 4 cents higher in most contracts.

  • Soybean futures have seen some light profit-taking following yesterday's friendly Supply & Demand Report.
  • And while USDA lowered U.S. soybean carryover more than expected to 150 million bu., it also raised its world carryover peg to 70.62 MMT.
  • CNGOIC forecasts Chinese soybean production fell 6.5% this year to 12.2 MMT, signaling the country's import needs will remain high.

 

Wheat have softened to trade fractionally to 2 cents lower in the SRW market, mostly around 4 cents lower for HRW wheat and around a penny lower in the HRS market.

  • Wheat futures hit new contract lows yesterday. Futures are seeing some followthrough sales today.
  • Yesterday's selloff was largely spurred by USDA's increase to 2013-14 domestic wheat carryover. Traders had expected USDA to trim its forecast.
  • USDA also upped its global 2013-14 wheat carryover projection from last month.
  • Meanwhile, fresh demand news has been lacking, despite recent softening of the U.S. dollar index.
  • Egypt bought 300,000 MT of Romanian and French wheat in its tender, fueling export demand concerns for U.S. wheat
  • According to official Russian customs data, wheat exports the first 10 months of the year of 10.52 MMT were down 26.5% from year-ago.
  • Meanwhile, FranceAgriMer has raised its wheat export forecast for the country to 18.95 MMT (18.26 MMT previously) due to better demand from outside the EU.
  • While frigid temps continue to blanket the Plains, traders' concerns with winterkill remain limited as much of the crop is insulated by snow or ice.

 

Live cattle futures are mixed this morning with December through April steady to slightly higher and farther deferred contracts slightly lower. Feeder cattle futures are also mixed.

  • Nearby live cattle contracts are trading near in line with last week's cash cattle trade at mostly $132, which is leaving traders to engage in some light positioning today.
  • But considering higher showlist estimates everywhere but Kansas and negative packer profit-margins, packers will be hard-pressed to pay up for supplies.
  • On the other hand, bitter cold across the Plains and Midwest are stressing cattle and encouraging feedlots to seek higher prices for market-ready animals.
  • The boxed beef market has failed to impress thus far this week as price gains have slowed movement. Yesterday, a slight dip in Choice and Select values did spur better movement of 198 loads, however.
  • Traders are weighing the discount nearby futures hold to the cash index against firmer corn prices today, which is resulting in choppy trade.

 

Lean hog futures are slightly to sharply lower this morning.

  • Average hog weights and head counts continue to rise in Iowa and southern Minnesota and are record-high. Weights ticked 0.7 lb. higher the week ended Dec. 7.
  • Cash hog bids are mixed today, with most paying steady to lower prices as packers are generally well supplied on near-term needs.
  • Ideas packers may be reluctant to market hogs due to frigid temps across the Midwest are helping to limit selling interest.
  • Selling pressure in the December contract is also limited by the roughly $1 discount to the cash hog index two days ahead of its expiration. But the February contract is at more than a $6 premium to the index.
  • Pork cutout values firmed 3 cents yesterday, but movement was light at 304.57 loads.
     
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