Market Snapshot, 10:00 a.m. CT (VIP) -- June 13, 2013

June 13, 2013 05:00 AM
 

Corn futures are posting losses around 3 to 5 cents across the board this morning.

  • Yesterday's Supply & Demand Report from USDA continues to weigh on the corn market, as USDA raised old-crop corn carryover by 10 million bu., whereas the trade had expected a similar reduction to carryover.
  • USDA's 2013-14 carryover projection also came in on the bearish side of expectations as USDA cut just 55 million bu. from its carryover projection from last month, whereas the market had been anticipating a 246-million-bu. cut. This eased the market's concerns about the poor start to the 2013 growing season.
  • Growers, on the other hand, are concerned about the yield impact of more rain in the Upper Midwest yesterday and the forecast for more rain to move into the western Corn Belt tomorrow.
  • Adding pressure, this morning's weekly export sales data showed corn sales of 81,500 MT for 2012-13 and 68,000 MT for 2013-14, which fell short of expectations.
  • But Gulf basis firmed 3 cents for immediate delivery this morning, signaling tight supplies and/or that export demand news may be ahead.

 

Soybean futures have softened to post double-digit losses this morning, with the front-month 20-plus cents lower.

  • Soybean futures are seeing followthrough selling today after USDA left both its old- and new-crop carryover pegs unchanged from May. Tight old-crop supplies are known and the new-crop projection confirms ideas production will rebound in 2013.
  • Wet conditions will result in some corn acres being switched to beans. The market is as yet unconcerned about the potential impact of late planting on yields.
  • The upper Midwest saw more rain overnight, and more is expected to move into the Corn Belt tomorrow.
  • This morning's weekly sales data showed soybean sales of 33,500 MT for 2012-13 and 447,100 MT for 2013-14, which came within expectations.
  • A 2-cent rise in Gulf basis for June delivery signals improved export demand and tight old-crop supplies.
  • Traders are ignoring news China stockpiled a greater-than-anticipated 30.8 MMT of domestic corn for state-owned reserves, increasing prices and tightening domestic supplies. This could increase the country's already strong soy import needs.

 

Wheat futures are 3 to 5 cents lower in Chicago and 1 to 3 cents lower in Kansas City. Minneapolis wheat is up 2 to 3 cents.

  • Spillover from corn and soybeans is weighing on Chicago and Kansas City wheat.
  • Minneapolis wheat, on the other hand, is benefiting from ongoing spring wheat crop planting delays.
  • Harvest-related hedge pressure is also weighing on the Kansas City market, as is forecasts for scattered rains on the Southern Plains.
  • Traders still have yesterday's USDA data on their minds, in which the agency raised the size of the winter wheat crop more than expected.
  • This morning's weekly export sales data showed wheat sales of 427,200 MT for 2013-14, which was within expectations. A total of 1,185,500 MT was carried over from 2012-13.

 

Live and feeder cattle futures are slightly lower in early trade.

  • Bid and asking prices remain wide, signaling late-week cash cattle trade is again likely. The wide spread between bids and asking prices is also telling of uncertainty as to whether feedlots or packers will have the advantage in this week's negotiations.
  • Boxed beef prices have been mixed throughout the week, but this has encouraged improved movement. Yesterday, 246 loads changed hands, signaling that consumers have responded well to $200-plus Choice boxed beef values.
  • Improved movement also signals retailers may be planning to feature beef over the Fourth of July holiday.
  • Showlist estimates are up slightly this week as feedlots carried over supplies after just light trade last week. This could give packers an advantage, despite strong profit margins.
  • Feeder cattle futures are seeing profit-taking after yesterday's strong gains.

 

Lean hog futures are up slightly in the front-month but mostly slightly lower in deferred contracts.

  • The front-month lean hog contract is enjoying followthrough buying today as the market is impressed by lean hogs' ability to sustain buying interest above the $100.00 level.
  • Plus, supplies are tightening, which has kept the cash hog market pointed higher.
  • But the rest of the market is seeing some profit-taking as the market is technically overbought according to the Relative Strength Index.
  • Plus, packers have seen additional declines in negative cutting margins, which is encouraging some to reduce kill hours.
  • Talk China is buying or will buy U.S. pork remains an underlying source of support however.
  • Weekly pork export sales rose 5,500 MT from the week prior to 12,100 MT. The tally included 2,800 MT in sales to Hong Kong.
  • The pork market is also indicative of domestic pork demand strength. The pork cutout value rose $1.27 yesterday and movement was decent at 377 loads.
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