Market Snapshot, 10:00 a.m. CT (VIP) -- November 14, 2013

November 14, 2013 04:09 AM
 

Corn futures have softened a touch to trade steady to a penny lower.

  • Buying and selling interest remains limited in the corn market, as has been the trend this week. Strength in the greenback on disappointing euro-zone economic data is also favoring market bears.
  • On one hand, traders fully expect this year's record-large crop to alleviate the tight supply situation of recent years.
  • On the other hand, the price dip this fall has brought exporters back to the table.
  • A 1- to 4-cent jump in Gulf basis for December through February delivery indicates more demand news may be ahead.
  • Traders will receive an update on export demand in tomorrow's Weekly Export Sales Report.

 

Soybean futures are up 3 cents in the front-month but 1 to 3 cents lower in 2014 contracts.

  • Strength in the U.S. dollar index is pressuring the bean market after yesterday's slight gains.
  • Traders have been reminded of strong soy demand on multiple occasions this week, but market action indicates this is enough to support the market but that major export business is needed to spur active buying.
  • USDA announced India purchased 40,000 MT of soybean oil for 2013-14.
  • Bulls are hopeful tomorrow's weekly export sales update reflects continued strong soy demand. Recent reports have generally topped lofty expectations.

 

Wheat futures are 1 to 5 cents higher, with the winter wheat markets leading gains.

  • Wheat futures are enjoying some corrective short-covering today amid ideas the downside has been overdone.
  • A flurry of export business adds to the positive tone. Japan bought 60,346 MT of U.S. milling wheat, Brazil bought at least 60,000 MT of U.S. HRW wheat and South Korean flour millers purchased 30,000 MT of U.S. milling wheat.
  • The market is also awaiting the results of Egypts' tender for an unspecified amount of soft and/or milling wheat from global suppliers.
  • Light support also stems from SovEcon's forecast for Russia's grain exports to decline from 2.5 MMT in October to between 2 MMT and 2.1 MMT in November.
  • Meanwhile, favorable winter wheat conditions continue to limit buying enthusiasm to short-covering.

 

Live cattle futures are enjoying slight gains in most contracts this morning. Feeder cattle futures are slightly to moderately higher.

  • Most packers have yet to establish bids, signaling trade may not take place until Friday. Last week, trade in the Southern Plains mostly took place around $131.
  • While showlist estimates are heavier in most locations this week and prices in the boxed beef market have been mixed this week, movement in the product market has improved notably. Considering the fact Choice boxed beef cuts remain well above $200 per cwt., this has led to some optimism cash trade could take place at at least steady prices.
  • Therefore, traders are comfortable with the $2 premium December live cattle hold to the bulk of last week's cash trade.
  • Weaker corn prices and tight calf supplies are lifting feeder cattle futures.

 

Lean hog futures gapped lower on the open and are posting moderate losses across the board.

  • The gap-lower start for lean hogs took the market through key near-term levels of support, spurring some additional technical pressure. Strength in the U.S. dollar index adds profit-taking incentive.
  • Supplies are rapidly building both in terms of numbers and weights. As a result, the cash hog market is steady to lower today, despite wide packer profit margins.
  • Meanwhile, the pork market continues to slide, with the pork cutout value dropping $1.50 yesterday. On the bright side, the recent decline has spurred impressive movement.
  • December futures have narrowed their premium to the cash hog index to less than 50 cents.
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