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

October 4, 2013 05:05 AM
 

Corn futures are up 2 to 3 cents this morning.

  • Corn futures are benefiting from some light short-covering as traders ready positions for the weekend. A lack of government data this week has encouraged some traders to head to the sidelines.
  • Rains and even some snow (in the Dakotas) are moving across the Corn Belt today, slowing harvest activity. This is resulting in mixed corn bids across the Midwest as supplies are tight.
  • The market is unlikely to receive a USDA update on harvest progress Monday due to the government shutdown.
  • There has been a pickup in export demand this week, signaling foreign buyers see value on the price break. But South Korea passed on a tender to buy 140,000 MT of optional origin corn overnight.
  • Informa Economics will update its corn crop estimate at 10:30 a.m. CT.

 

Soybean futures are posting fractional to 3 cent losses through the July contract, with far-deferred months mixed.

  • Soybeans have pared overnight losses, but bears maintain the advantage.
  • Harvest pressure continues to weigh on the bean market, especially with the lack of daily sales news. USDA has halted daily and weekly sales announcements and China has been on a public holiday this week.
  • Taiwan tendered to buy 40,000 to 60,000 MT of soybeans each from the U.S. and Brazil overnight.
  • Belt-wide rain and snow in northern areas are helping to limit pressure, as this is expected to slow harvest activity.
  • Informa Economics will update its soybean crop estimate at 10:30 a.m. CT.

 

SRW wheat is fractionally lower in the front-month contract, but mildly higher in deferred contracts. The HRW market is similarly split. HRS wheat is 1 to 3 cents higher.

  • Wheat is enjoying some technical buying as the market has signaled a seasonal low is in place. Mild strength in the corn market is also supportive.
  • Support is also coming from excessive rain during planting season in Ukraine and Russia, which will cut exportable supplies from the Black Sea region for 2014-15. Ukraine's ag minister says the country's wheat crop could be cut by one-third to around 15 MMT from around 22 MMT this year.
  • On the other hand, Ukraine's ag ministry reports the country's grain exports through Oct. 4 have risen 11.5% from year-ago to 6.3 MMT, thanks to stronger wheat and barley exports. The ministry forecasts exports between 26 MMT and 30 MMT for 2013-14, versus 23 MMT the previous season.
  • Statistics Canada raised its wheat crop estimate to a record 33.026 MMT, which is 22% higher than year-ago and above the average pre-report guess of 32.9 MMT. This is limiting buying interest.

 

Live cattle futures are posting slight losses in all but the front-month contract, which is slightly higher. Feeder cattle opened under pressure, but the market has improved to trade mostly slightly higher.

  • Cash cattle trade got underway yesterday at steady to lower prices in Nebraska, while sales in Kansas and Texas took place at $126 -- steady with week-ago.
  • This was somewhat disappointing as tighter showlists had many expecting steady to higher cash action. But packers have seen margins drop into the red after paying higher prices for animals the previous two weeks.
  • Nearby contracts maintain a premium to this week's trade, opening the door for some light profit-taking. Strength in the U.S. dollar index is also encouraging of this.
  • But selling is limited to profit-taking as supplies are expected to tighten going forward.
  • Also, lacking government-based wholesale beef trade data, traders and processing plants are turning to private sources for information. Urner Barry reported Choice boxed beef prices were 72 cents higher Thursday, while Select beef was $1.03 higher.
  • Traders are again pushing the feeder cattle market higher ahead of the weekend as the technical posture of the market remains fully bullish.

 

Lean hog futures are mixed with a slight upside bias this morning.

  • The lean hog market continues to see some light corrective short-covering after last Friday's bearish Quarterly Hogs & Pigs Report. The market continues to discount the report data that showed the porcine epidemic diarrhea virus (PEDV) had far less of an impact on supplies than expected.
  • Slaughter is expected to be down from year-ago this week, adding to questions about the report data.
  • Early cash hog bids are steady to 50 cents lower this morning. Private sources indicate pork processors are still enjoying wide profit-margins thanks to steady to lower cash prices this week and private reports of pork strength this week.
  • Strength in the U.S. dollar index has encouraged bouts of light profit-taking.
     
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