Market Snapshot, 10:00 am CT (VIP) -- November 20, 2013

November 20, 2013 04:09 AM
 

Corn futures are around a penny lower this morning.

  • Bears have a slight advantage in the corn market today amid dollar strength.
  • Lanworth raised its world corn production estimate by 5 MT to 963 MMT, but the firm lowered its U.S. corn production estimate from last week to 13.911 billion bu.
  • Japanese corn imports of 1.185 MMT in September were a 5.2% increase over year-ago, but the U.S. accounted for just 54.6% of this amount, compared to 73.3% of last year's total for September.
  • Gulf basis rose 2 cents for November through January delivery this morning, while later delivery was steady to 1 cent higher. This signals strong export demand.
  • Ethanol production declined 23,000 barrels per day (BPD) the week ended Nov. 15 to 904,000 bpd. Ethanol stocks also fell 70,000 barrels to 15.08 million barrels.

 

Soybean futures continue to trade in a narrow, choppy range.

  • Buying and selling interest is limited in the soybean market today amid uncertainty about near-term price direction.
  • Favorable rain in Brazil reminds of record production prospects for South America this growing season.
  • But Lanworth trimmed its world soybean production estimate by 1 MMT to 289 MMT; it also trimmed its U.S. soybean production forecast from last week to 3.264 billion bushels.
  • This morning, Gulf soybean basis is 2 to 3 cents weaker for near-term delivery, signaling the availability of new-crop supplies is plentiful.
  • News Vietnam feedmillers bought 240,000 MT of soymeal from Argentina from April to July is also curbing buying enthusiasm.
  • But traders expect USDA to confirm strong demand for U.S. soybeans in tomorrow's export sales report.

 

Wheat futures have softened to post losses of 1 to 5 cents in the winter wheat markets, while HRS wheat is steady to a penny lower.

  • After posting the first upside day of trade in quite some time yesterday, sellers have the upper hand today. Dollar strength is also supportive of this.
  • With the winter wheat crop expected to go into dormancy in good condition, it has been tough for bulls to gain any traction.
  • Spillover from the corn market also makes it tough for wheat to find buyers.
  • But selling is being limited by news late-season rains are raising concerns about the quality and yields of the Western Australia wheat crop.
  • Also, USDA announced a 110,000 MT SRW wheat sale to Egypt for 2013-14.
  • Lanworth made no changes to its world wheat production forecast this morning.

 

Live and feeder cattle futures are enjoying slight gains this morning.

  • Live cattle futures are enjoying some corrective short-covering today as the market broke through key resistance levels yesterday but respected strong uptrending support drawn off the lows since May.
  • Also giving traders incentive to cover short positions is the dip by some contracts into oversold territory according to the 9-day Relative Strength Index.
  • Initial asking prices are at $132 to $134 this week, which would be steady to higher compared with last week's action, but many think feedlots could have a tough time getting steady prices this week as packers have seen cutting margins dip further into the red and the boxed beef market has softened thus far this week.
  • Choice boxed beef values dropped $1.54 and Select declined $1.81 yesterday, though movement improved to 190 loads.
  • Softer corn prices are supporting feeder cattle futures this morning.

 

Lean hog futures are enjoying slight gains this morning after a mixed start.

  • Traders are engaging in some light positioning this week as they sort out market fundamentals. The market has consolidated in recent sessions.
  • Hog supplies continue to build both in terms of numbers and weights. Average hog weights in Iowa and Southern Minnesota rose 0.4 lb. last week to a record 281.2 pounds.
  • But strong packer profit margins are helping the market absorb these supplies fairly well, keeping the decline in the cash market gradual. Cash hog bids are steady to lower today.
  • Buying interest in December lean hogs is being limited by the $2-plus premium it holds to the cash hog index, which is declining.
     
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