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

September 10, 2013 05:10 AM

Corn futures are seeing gains of 3 to 4 cents in all but the front-month September contract, which is slightly lower.

  • Yesterday's dip in USDA's crop condition ratings, which translated to a 4-point slide in our weighted Crop Condition Index (0 to 500 point scale) is encouraging light short-covering this morning.
  • Traders are also readying for USDA's Supply & Demand and Crop Production Reports on Thursday.
  • The market expects USDA to lower its national average yield projection to 153.9 bu. per acre for a 13.646 billion bu. crop, down 117 million bu. from August.
  • Pre-report expectations call for USDA to cut its 2013-14 carryover by 14 million bu. from last month to 1.697 billion bushels.
  • Meanwhile, extreme heat in the Midwest continues to push crop maturity, and in some cases promote premature crop death.


Soybean futures opened under pressure, but the market has since improved to trade 1 to 2 cents higher in all but the front-month contract.

  • Pre-report positioning and some fresh demand news have returned some bargain buyers to the bean market.
  • USDA announced a 121,000-MT soybean sale to an unknown destination this morning.
  • Also, the market expects recent stressful weather to result in lower carryover and production pegs from USDA on Thursday.
  • Pre-report expectations are for USDA to estimate a national average yield of 41.3 bu. per acre for a 3.149-billion-bu. crop, down 106 million bu. from last month.
  • Due to the smaller crop estimate, traders look for USDA to trim 2013-14 carryover to around 161 million bu., down from 220 million bu. last month.
  • Light support also comes from USDA's confirmation that the condition of the bean crop declined last week. This translated to a 6-point drop on Pro Farmer's weighted Crop Condition Index (0 to 500 point scale) to 336. Iowa led the decline.
  • More declines are likely this week due to well above-normal temps in the Midwest with limited precip.
  • Gulf basis plunged 31 cents for immediate delivery and it was 1 to 5 cents lower for other months, signaling increased farmer sales as harvest picks up.


Wheat futures have rallied to trade roughly 3 to 5 cents higher across all flavors.

  • Gains in the corn market returned buyers to the wheat pit.
  • The market is also benefiting from news that Brazil has increased duty-free wheat imports by 400,000 MT through the end of November, which pushes the quota to 2.7 MMT.
  • The Australian Bureau of Agricultural and Resource Economics and Sciences has lowered its wheat production peg by 932,000 MT to 24.467 MMT. This is still up from 22.1 MMT last season. The bureau also trimmed its Australian wheat export forecast by 100,000 MT to 19.5 MMT.
  • UkAgroConsult expects Ukraine to harvest a record grain crop of 56.06 MMT this year thanks to stronger-than-expected corn and wheat crops. Previously, the firm pegged the grain crop at 53.8 MMT.
  • The market is also looking ahead to Thursday's reports. Traders look for USDA to raise carryover by around 5 million bu. from last month to 556 million bushels. Report data for corn could be the larger driver of post-report action for the wheat market.


Live cattle futures are narrowly mixed with a downside bias. Feeder cattle futures are posting slight to moderate losses.

  • Traders are trimming the premium nearby contracts hold to last week's mostly $123 cash action as early indicators are not supportive of higher trade this week. Early expectations are for steady cash cattle trade as packer profit margins have fallen to near breakeven.
  • Yesterday, Choice and Select cuts slipped 90 cents and $1.33, respectively, though this did encourage strong movement of 202 loads.
  • Also, showlist estimates are up slightly in the Southern Plains and 11,000 head higher in Nebraska as feedlots resisted lower prices in the state.
  • But supplies are expected to tighten going forward and beef demand typically rises heading into fall, which is limiting selling interest. There are some concerns about how consumers will respond to lofty beef prices, however.
  • Slightly higher corn prices are pressuring feeder cattle futures.


Lean hog futures are posting slight losses this morning.

  • Lean hogs are seeing some light profit-taking after yesterday's run-up that resulted in a new contract high for the December contract.
  • But the fundamentals still favor market bulls. Ongoing heat in the Midwest is limiting hog weight gains and keeping the cash hog market steady to higher.
  • Also, the pork cutout rose 32 cents yesterday and movement was solid at 309.3 loads.
  • The cash hog index has ticked up in recent sessions and the October lean hog contract is at more than a $1 discount to the index.
  • Early pressure brought nearby contracts out of overbought territory.
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