Market Snapshot, 10:00 am CT (VIP) -- November 4, 2013

November 4, 2013 04:03 AM
 

Corn futures are favoring the upside in choppy trade this morning.

  • Spillover from the soybean market and slight weakness in the U.S. dollar index has the corn market favoring the upside this morning.
  • Some are also optimistic this morning's export inspections report will remind of rebuilding corn demand.
  • But countering this are ideas USDA on Friday will confirm a record-large U.S. corn crop.
  • The trend has been for private crop watchers to raise their estimates. Most recently, INTL FC Stone raised its corn production forecast by 217 million bu. from last month to 14.367 billion bu. and Informa Economics pegged the crop at 14.223 billion bushels.
  • Gulf basis is steady to a penny higher this morning as harvest delays in the Midwest have slowed grain movement across the country and ethanol profit margins are on the rise.
  • More rain and snow is expected the first half of the week for much of the Corn Belt.
  • Traders will get an update on harvest progress this afternoon.

 

Soybean futures are mostly 7 to 10 cents higher this morning with the exception of the November contract, which is just slightly higher.

  • Ideas the downside has been overdone are lifting the bean market to start the week.
  • The export inspections report is expected to remind of strong soybean demand among exporters, with inspections expected to come in between 60 million and 75 million bushels.
  • But otherwise, buying interest will remain limited ahead of USDA's key reports Friday.
  • Gulf basis is 2 to 5 cents lower for November through January shipment, signaling exporters currently don't have a shortage of supplies.
  • The market has found technical support around Friday's lows.

 

Wheat futures are posting slight losses in the SRW and HRW markets this morning, while HRS wheat remains mixed.

  • Rain in the forecast for winter wheat country is causing those markets to favor the downside.
  • Otherwise, direction in the wheat market is lacking. A weaker U.S. dollar index and mild gains in the corn market are helping to limit selling pressure.
  • Ideas demand for U.S. wheat has again slowed remains a damper on buying interest. Traders will get an update on USDA's demand projections on Friday in the monthly Supply & Demand Report.
  • Saudi Arabia bought 720,000 MT of wheat, with the seller having the option of sourcing the business with supplies from the U.S., Europe, South America and Australia.

 

Live and feeder cattle futures are narrowly mixed this morning.

  • Traders are engaging in some light positioning as they await more signals as to likely cash action this week.
  • Futures are in line with last week's cash cattle trade at $132, which was steady with the week prior but below traders' expectations. Therefore, the market is on watch for a short-term market top.
  • While Choice and Select boxed beef values remain at lofty levels, prices did soften to wrap up the week and movement has slowed notably.
  • Nearby feeder cattle contracts are benefiting from the slight discount they hold to the cash index.

 

Lean hog futures are choppy to start the week.

  • Lean hogs saw a sharp selloff late last week, indicating a near-term top may be in place.
  • But the market has given such signals in the past before embarking on another run higher. This is keeping traders cautious toward both the long and short side of the market.
  • Packers continue to enjoy wide profit margins, which is helping to keep early cash hog bids mostly steady, despite seasonally expanding supplies.
  • But the pork cutout value did fall 43 cents Friday and movement was light at 257.57 loads.
  • The front-month contract is in line with the cash hog index, also limiting near-term price direction.
     
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