Market Snapshot, 10:00 am CT (VIP) -- December 24, 2013

December 24, 2013 04:07 AM
 

NOTE: Grain markets close at noon CT today, while trading in livestock markets halts at 12:15 p.m. CT. Therefore, we will not send a noon CT Market Snapshot.

Corn futures have improved to trade mixed with nearby contracts favoring the upside and deferred months the downside.

  • The corn market is choppy as those remaining in the market ready positions for what will be an extended break from the markets for some.
  • Improved rain chances for Argentina over the 6- to 10-day outlook are pressuring deferred contracts as this eases concerns about generally hot and dry conditions this week.
  • But light support comes from news U.S. dried distillers grain (DDG) shipments to China have been uninterrupted despite recent big rejections of U.S. corn, according to China National Grain and Oils Information Center.
  • Also, South Korea purchased 120,000 MT of U.S. corn overnight -- one cargo was switched from Black Sea origin.
  • Gulf corn basis is steady across the board this morning.

 

Soybean futures have improved to trade fractionally to 3 cents higher through the July contract, while far-deferred months are slightly lower.

  • The soybean market is seeing some light bull spreading activity today amid thin holiday trade.
  • While there is rain in the forecast Friday and over the next 6 to 10 days in Argentina, high temps in the 90s or above this week are stressing the crop.
  • Nearby contracts are also benefiting from daily export sales announcements. USDA announced 185,000 MT of soybean sales to unknown destinations, with 65,000 MT for 2013-14 and 120,000 MT for 2014-15. The department also announced a sale of 114,000 MT of soybeans to Egypt for 2013-14.
  • Soybean Gulf basis is steady this morning.

 

Wheat futures are mostly 1 to 2 cents lower across all three flavors this morning.

  • Strength in the U.S. dollar index and concerns about demand for U.S. wheat are weighing on the wheat market. Plus, the charts clearly favor market bears. The market trimmed early losses as nearby corn futures turned higher.
  • India tendered to export a total of 250,000 MT of wheat overnight, reminding traders of the competition U.S. wheat faces on the global market.
  • Traders are not concerned about bitter cold temps in winter wheat areas as the frigid temps were largely preceded by fresh snow. Plus, temps are rebounding across much of the region.
  • SRW Gulf basis jumped 5 cents for April delivery but held steady for other months. This could signal the steep drop in prices has spurred export demand. However, most will wait to see how low prices go before booking needs.

 

Live cattle futures are posting slight losses this morning, as are feeder cattle futures.

  • Traders are booking some profits ahead of the Christmas holiday.
  • Early expectations are for steady cash cattle trade this week. While showlist estimates are significantly tighter (down around 31,000 head) this week and frigid temps are stressing livestock, both beef and cash market demand are light during this holiday season.
  • Yesterday just 101 loads of beef changed hands on a 10-cent price decline for Choice cuts and a $2.09 gain in Select cuts.
  • Selling interest is being limited by yesterday's Cold Storage Report, which reflected slightly stronger beef demand for November than the market expected.
  • Spillover from live cattle and profit-taking ahead of Christmas are weighing on the feeder cattle market.

 

Lean hog futures are posting losses around 10 to 20 cents this morning.

  • Bears have a slight advantage in the lean hog market amid thin holiday trade.
  • Cash hog bids are steady to weaker today on limited packer demand preceding the holiday. Therefore, traders' concerns about frigid temps deterring hog transportation are limited.
  • The market is also beginning to ready for Friday's Quarterly Hogs & Pigs Report. The report is expected to show All Hogs and Pigs on Dec. 1 at 99.9% of year-ago levels, Kept for Breeding at 101% and Kept for Marketing at 99.8% of year-ago levels.
  • Many traders are reducing risk ahead of the report, however, as the impact of the porcine epidemic diarrhea virus (PEDV) remains a question mark.
  • Pork stocks in storage at the end of November were slightly less than anticipated at 546.333 million pounds.
     
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