Market Snapshot, 10:00 am CT (VIP) -- December 23, 2013

December 23, 2013 04:07 AM

Corn futures are steady to fractionally higher through the September contract, while far-deferred months are posting slight losses.

  • Traders are readying positions for a holiday break from the market. Losses in the soybean market are keeping buying interest to a minimum.
  • China imported 787,043 MT of U.S. corn last month, according to official customs data, which was up 108% from year-ago. But those imports were short of expectations, due in part to rejections of some U.S. cargoes.
  • Gulf corn basis slipped 3 cents for immediate delivery, signaling slowing demand that is typical around the holidays.
  • Nearby contracts are seeing light support for an unfavorable hot and dry 10-day forecast for Argentina as the crop approaches its key kernel fill stage.
  • South Korea tendered for 70,000 MT of feed corn this morning.


Soybean futures have softened to trade 8 to 10 cents lower through the August contract, with far-deferred months posting lighter losses.

  • Early gains in the soybean market have given way to profit-taking as the front-month contract again struggled to find buying interest in the $13.50 area. January soybeans have been unable to close above that resistance level since mid-September.
  • Early support stemmed from the forecast for hot, dry conditions over the next 10 days for Argentina, with the exception of rain chances on Wednesday.
  • However, this support faded somewhat as traders recognize that the large South American crop is generally rated in favorable condition.
  • The market is brushing off news of a 120,000-MT daily sale of soybeans to unknown destinations for 2013-14. Strong soy demand is known.
  • Gulf soybean basis firmed 2 cents for immediate delivery this morning, possibly signaling more demand news is ahead.


SRW and HRW wheat are mostly 4 to 5 cents lower, with HRS wheat down 2 to 4 cents.

  • The technical posture of the wheat market remains decidedly lower. This is making it tough for wheat to find any buying interest ahead of the holidays.
  • Russia's ag ministry says harvest of the country's wheat crop is complete and that wheat production totaled 54.4 MMT, which is up sharply from 39.7 MMT last year. Plus, News 91% of Ukraine's winter grain crop is rated in good to satisfactory condition, according to UkrAgroConsult. This reminds traders that strong export competition will continue.
  • This morning's export inspections report will provide another update on export demand for U.S. wheat.
  • Traders are ignoring bitterly cold temps across winter wheat areas of the United States. Wheat is exposed to these conditions in some areas, including eastern Colorado, northern Kansas and southern Nebraska.
  • The market is also showing little response to Chinese wheat imports for November that totaled 968,074 MT, which was up 721.1% from year-ago.


Live cattle futures are enjoying slight gains through the August contract this morning, with far-deferred months steady to slightly lower. Feeder cattle futures are narrowly mixed.

  • Live cattle futures are benefiting from Friday's Cattle on Feed Report, which showed placements well below the average pre-report guess. On Feed and Marketings came in below year-ago but near the average pre-report trade guess. The feedlot number was the second lowest Dec. 1 feedlot number since USDA began recording data in 1996.
  • However, futures rallied ahead of the report, which is limiting buying enthusiasm today.
  • Light support also stems from frigid temps in the Northern Plains and Midwest, which will stress livestock and limit feedlots' willingness to market cattle.
  • However, packers will be preparing for another holiday-shortened week, which tempers cash trade expectations. Last week, trade took place at mostly $1 lower prices of $130 in the Southern Plains.
  • On Friday, Choice and Select boxed beef cuts fell 92 cents and 35 cents, respectively, and movement slowed to just 110 loads. This is also limiting buying interest.
  • Gains in the corn market are encouraging light profit-taking in some feeder cattle futures contracts. Tight supplies will continue to limit the market's downside, however.


Lean hog futures are narrowly mixed in early trade.

  • Early cash hog bids are lower, which is encouraging some light selling in the lean hog market to start the week. Demand is limited ahead of the Christmas holiday.
  • The CME lean hog index continues to trend lower. Most recently it was projected 31 cents lower to $80.24, which is more than $6 below the February contract. This is limiting buying interest in nearby futures.
  • But assertions by executives at Smithfield Foods that the porcine epidemic diarrhea virus (PEDV) will reduce U.S. pig production by 2% to 3% in 2014 is also helping to limit selling interest.
  • On Friday, the pork cutout value slipped 54 cents and movement was light at 290.88 loads.
  • Thin holiday trade is also helping keep the hog market choppy today as some traders are taking an extended break from the market.
  • Traders are also evening positions ahead of this afternoon's Cold Storage Report. Pre-report expectations are for pork stocks as the end of November to come in around 549.2 million pounds.
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