Market Snapshot, 10:00 am CT (VIP) -- October 30, 2013

October 30, 2013 05:08 AM
 

Corn futures are 1 to 3 cents lower this morning.

  • Earlier corrective buying interest has dried up and corn futures are now favoring a slightly weaker tone amid seasonal pressure as a record crop is being harvested.
  • Harvest has moved past the halfway point, but Midwest rains this week are expected to slow efforts to get the crop out of the field. Basis at interior locations is firming as rain slows harvest activity.
  • But a flurry of export activity overnight signals prices are rebuilding demand.
  • South Korean feedmakers purchased 368,000 MT of U.S. corn for March and April delivery, which follows the purchase of 140,000 MT of U.S. corn by another South Korea firm on Tuesday. Taiwan also bought 60,000 MT of U.S. corn overnight.
  • Ethanol production for the week ended Oct. 25 rose 14,000 barrels per day (bpd) to 911,000 bpd. Ethanol stocks fell 538,000 barrels to 14.96 million barrels.

 

Soybean futures are 3 to 5 cents higher this morning.

  • Ideas the downside has been overdone of late considering strong soybean export demand is encouraging some additional short-covering today.
  • The market also expects tomorrow's Weekly Export Sales Report, which will include three weeks of data, to show exporters took advantage of the government blackout and dollar weakness during the period.
  • Final harvest efforts are being slowed by rain in the Corn Belt. This has resulted in steady to higher basis levels in the region.

 

Wheat futures are 2 to 4 cents lower in the SRW market, with HRW wheat seeing lighter losses. HRS wheat futures are mixed.

  • Concerns about slowed demand for U.S. wheat continue to pressure the market.
  • Tomorrow's big export sales update for the weeks ended Oct. 10, 17 and 24 will provide insight as to recent demand.
  • Spillover from the corn market is making it tough for wheat to find buyers.
  • Brazil raised its tariff-free wheat import quota by 600,000 MT to 3.3 MMT, which could point to more business for the United States.
  • But countering this is news India has cut its floor price for exports of government wheat by 13%, which will make wheat shipments from the country more competitive.

 

Live and feeder cattle futures are posting slight to moderate losses this morning.

  • Profit-taking is weighing on the cattle markets this morning.
  • Yesterday, Choice and Select cuts rose $1.12 and 62 cents, respectively, but lofty prices are slowing beef movement. This raises concerns about retailer and consumer demand.
  • Nevertheless, gains in the boxed beef market should keep the cash market at least steady with last week's record-setting levels. But higher showlist estimates and negative profit margins for packers do add a bit of uncertainty.
  • Traders are also beginning to more actively even positions ahead of Thursday's Cattle on Feed Report. Placements are again expected to be the wildcard, as there is more than a 9-point spread between trade guesses, with the average coming in at 100.7% of last year's record-low levels for the month.
  • USDA's (delayed) Cold Storage Report tomorrow is expected to show frozen beef stocks as of Sept. 30 at 431.6 million lbs., which would be down 0.5% from the month prior but 1.5% above year-ago levels.

 

Lean hog futures are narrowly mixed this morning.

  • Technical-based buying propelled nearby futures to new contract highs in early trade, but light profit-taking has since weakened the December contract.
  • Ongoing concerns about the impact of the porcine epidemic diarrhea virus (PEDV) limit the downside to corrective selling at this time.
  • Average hog weights in Iowa and southern Minnesota for the week ended Oct. 26 rose 0.7 lbs., but the head count is down 9,000 from the week prior and 45,000 below year-ago numbers.
  • Tomorrow's Cold Storage Report is expected to show frozen pork stocks of 562.1 million lbs. as of Sept. 30, up 4.1% from August but down 10.4% from year-ago.
  • The pork cutout value slipped 36 cents yesterday and movement failed to impress at 321.14 loads. Traders are hoping $200-plus Choice boxed beef values will turn some retailers to cheaper pork.
  • Buying interest in December lean hogs is being limited by the $1-plus premium the contract now holds to the cash hog index.
     
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