Market Snapshot, 10:00 am CT (VIP) -- June 12, 2013

June 12, 2013 04:58 AM
 

 

Corn futures are steady to 3 cents lower in old-crop contracts, with new-crop futures mostly 5 to 7 cents lower.

  • Traders are in a holding pattern as they await USDA's Supply & Demand Report at 11:00 a.m. CT.
  • Pre-report expectations are for USDA to trim its old-crop carryover estimate from May by 11 million bu. to 748 million bu. and for it to cut 246 million bu. off its new-crop projection to 1.758 million bushels.
  • Traders will also be watching to see if USDA lowers its national average yield projection due to the late start to the growing season.
  • Rain is again crossing the Midwest today, cementing ideas many of the remaining unplanted corn acres will be switched to another crop or remain unseeded.
  • A 3-cent slide in Gulf basis for immediate delivery reminds of lackluster export demand.

 

Soybean futures are choppy to mostly lower. Old-crop contracts are mixed with new-crop contracts posting double-digit losses.

  • USDA's Supply & Demand Report today will remind traders of tight old-crop supplies and for a rebound in 2013-14 carryover.
  • Traders expect USDA to leave its old-crop soybean carryover peg unchanged from last month at 125 million bu., but they expect USDA will raise its new-crop carryover peg by 8 million bu. from last month to 273 million bushels.
  • Anticipation of the reports is keeping attention away from another round of rains in the Corn Belt that will extend the time before farmers can get back into the field. Talk about the yield implications of late soybean planting is building.
  • Outside markets are mildly friendly this morning, with the Dow Jones Industrial Average slightly higher and the U.S. dollar index slightly lower.

 

Wheat futures are mostly 7 to 9 cents lower in Chicago and Kansas City, while Minneapolis what is down 2 to 4 cents.

  • Traders in the wheat market are showing no interest in covering short positions ahead of USDA's reports at 11:00 a.m. CT.
  • They expect USDA to estimate all wheat production at 2.026 billion bu., which would be down 31 million bu. from last month and 235 million bu. below year-ago.
  • All winter wheat is expected to come in at 1.457 billion bu., which is down 29 million bu. from last month and 188 million bu. below year-ago.
  • Meanwhile, traders look for only minor revisions to old-crop wheat carryover from last month, while new-crop carryover is expected to decline by around 36 million bushels.
  • ABARES has raised its forecast for the 2013-14 Australia wheat crop by 499 MT to 25.399 MMT, which, if realized, would be up 15% from last season.

 

Live cattle futures are off to a choppy start. Feeder cattle got off to a firmer start, but they have since softened to post slight losses.

  • Buying and selling interest is limited as traders wait for cash trade to get started.
  • Futures remain at a $2-plus discount to last week's trade at $122 in the Southern Plains and mostly $123 to $124 cash action in Nebraska, limiting selling interest.
  • But uncertain cash prospects this week are also limiting buying interest. Showlist estimates are slightly higher this week and the boxed beef market has delivered a mixed price performance, though movement has been solid. Packers are enjoying wide margins.
  • Yesterday, Choice beef values softened 19 cents and Select rose 72 cents. Movement was again solid at 209 loads.
  • Feeder cattle futures are weighing the discount futures hold to the cash market against weakness in the corn market.

 

Lean hog futures are moderately higher this morning.

  • Lean hog futures are building on yesterday's strong gains spurred by optimism about Chinese pork demand, solid domestic demand and tightening market-ready supplies.
  • The June contract moved above the $100.00 mark yesterday and above the $101.00 mark today; July futures are just shy of the century mark. This is also encouraging some technical buying today.
  • Cash hog bids are again steady to higher today as packers are in need of supplies and market-ready hogs are not readily available.
  • But some packers have scaled back kill hours as they have been cutting in the red for an extended period.
  • The pork cutout value rose 85 cents yesterday and movement picked up to 388.5 loads.
  • The fact that futures are technically oversold does raise a cautionary flag, however.
     

 

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