Market Snapshot, 10:00 a.m. CT (VIP) -- May 31, 2013

May 31, 2013 05:14 AM
 

Corn futures are 10 cents higher in the July contract and up around 4 to 5 cents in new-crop options.

  • July futures are receiving support from the positive export sales figures released from USDA this morning. Weekly export corn sales topped the guess range at 85,700 MT for 2012-13 and 789,600 MT for 2013-14.
  • Rains continue to fall on already soaked areas of the Corn Belt again this morning with more expected to linger into early Saturday morning. Forecasts call for clear skies into early next week with forecast calling for more rain to return by midweek.
  • Traders are favoring the upside as they even positions for month-end. They expect heavy rains to reduce projected corn acres, as some will be switched to soybeans and some will be claimed as prevent-plant. Late-planted corn would also be at risk of yield loss.
  • Also today, International Grains Council raised its 2013-14 world corn crop peg by 6 MMT from last month to 945 MMT.
  • Gulf basis fell 3 cents for immediate delivery was steady for June and July delivery and firmed 5 to 14 cents for August.

 

Soybean futures surged 18 cents to 23 cents higher this morning.

  • Soybean futures have added to opening gains with old-crop futures leading the rally.
  • Planting delays continue to be the primary concern, even though there is plenty of uncertainty about how many intended corn acres will eventually be switched to soybeans.
  • Rains continue to fall across areas of the Corn Belt, which will further delay planting efforts. The forecast calls for a relatively dry weekend, but more rains in the forecast to return to the Corn Belt next week.
  • USDA reported a net export sales reduction of 108,000 MT for 2012-13, with China canceling 207,500 MT of purchases. For 2013-14, weekly sales totaled 756,600 MT, including sales of 587,000 MT to China. Net export sales matched expectations.
  • USDA announced a daily sale of 30,000 MT of soyoil to Germany for 2012-13.
  • Gulf basis is unchanged in the early morning trade.

 

Wheat futures are slightly weaker with Chicago and Kansas City. Minneapolis wheat is mostly 2 to 5 cents higher.

  • Fallout from the discovery of GMO wheat in Orgeon continues to pressure wheat futures.
  • South Korea now says it will halt U.S. wheat shipments until tests are conducted on recent shipments, joining Japan in temporarily suspending U.S. wheat shipments. Taiwan says it is "reviewing" U.S. wheat shipments and may ask exporters to guarantee they are GMO-free.
  • Adding pressure, International Grains Council today raised its global wheat production forecast for 2013-14 to 682 MMT, up 2 MMT from the mont prior.
  • Gains in the U.S. dollar index are also pressuring wheat this morning.
  • Traders are ignoring continuing planting delays in the Northern Plains prompted by wet weather and forecasts for more as they concentrate on the potential loss of demand due to the GMO discovery.
  • Also, heat and dryness continue to stress HRW wheat on the Southern Plains.
  • Weekly wheat export sales were stronger than anticipated at 35,900 MT for 2012-13 and 728,300 MT for 2013-14.
  • Gulf wheat basis is unchanged this morning.

 

Live cattle futures are slightly higher, while feeder cattle futures are mixed.

  • Futures prices are choppy as traders continue to wait for direction from the cash market. Futures continue to trade at a discount to cash prices.
  • Most traders are looking for at least steady cash cattle trade in the Southern Plains compared with last week.
  • Boxed beef movement has been better-than-expected coming out of the holiday weekend. Choice beef weakened 98 cents and Select fell $1.24 Thursday afternoon, but prices are still near record levels and movement has improved this week.
  • Strength in the corn market is limiting buying interest in feeder cattle futures.

 

Lean hog futures are slightly firmer.

  • Lean hog futures are seeing support from strength in the cash hog market and positive technical indicators despite a poor close Thursday. This is causing traders to favor the upside as they even positions for month-end.
  • The pork cutout value rose 67 cents yesterday and movement was decent if not impressive at 395.2 loads.
  • Packer margins have moved into the black and slaughter supplies and carcass weights are declining seasonally. This is expected to keep the cash market mostly steady.
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