Market Snapshot, 10:00 am CT (VIP) -- September 18, 2013

September 18, 2013 05:09 AM
 

Corn futures are enjoying marginal gains of around 1 cent this morning.

  • Corn futures are seeing some light short-covering this morning as December corn found technical support around $4.50 in early trade.
  • But a wetter weather outlook is limiting buying enthusiasm. Rains are moving across Midwest today and widespread showers are in the 6- to 10-day outlook. The market expects this to help the crop to stabilize, though the reality is that rains are too late to help much of the crop fill.
  • Harvest is increasing available supplies, also limiting buying enthusiasm.
  • But a 2-cent uptick in Gulf basis for immediate delivery signals some value buying may be occurring among exporters. Basis slipped a penny for October delivery and held steady for deferred months.
  • News Lanworth increased in its U.S. corn production estimate by 87 million bu. to 13.483 billion bu. with an average national yield of 152.9 bu. per acre is also limiting buying.
  • Weekly ethanol production fell 10,000 barrels per day (bpd) to 838,000 bpd the week ended Sept. 13. Ethanol stocks fell 91,000 barrels to 16.18 million barrels.
  • Interest in adding risk is limited ahead of the conclusion of the Federal Open Market Committee meeting this afternoon. Traders expect the Fed will announce mild tapering of its bond-buying stimulus measures.

 

Soybean futures are choppy. November and January soybeans are posting two-sided trade, while farther deferred contracts are 3 to 8 cents higher.

  • Rains moving across the Corn Belt and the 6- to 10-day forecast for precip for much of the Midwest along with above-normal temps are spurring ideas the crop could add or hold onto yield potential initially encouraged some followthrough sales.
  • USDA this morning reported a daily sale of 1.93 MMT of soybeans to China and another 182,000 MT of soybeans to an unknown destination -- both for 2013-14 delivery. But these sales were likely confirmation of previously announced "goodwill" buys from China, which is limiting any positive response.
  • News Lanworth raised its world soybean production forecast by 3 MMT to 281 MMT is also curbing buying interest.
  • Gulf basis held steady this morning.

 

Wheat futures are roughly 1 to 3 cents higher for all three flavors this morning.

  • Ideas the market is due for a bounce and strength in the corn market is encouraging light short-covering in the wheat market this morning.
  • But improved planting conditions across the Southern Plains are keeping buying interest in check.
  • Also, the market was again reminded of expectations for ample world wheat supplies today as Lanworth raised its world wheat production forecast by 2 MMT to 704 MMT, citing improved crop prospects in Kazakhstan and Russia.

 

Live cattle futures are posting slight losses in early trade. Feeder cattle futures are also under light pressure.

  • Nearby live cattle futures remain at a premium to last week's cash cattle trade at $123, which is encouraging some light followthrough selling today as the market waits for cash trade to get underway.
  • The boxed beef performance thus far this week has failed to impress. Yesterday, Choice cuts slipped a penny while Select values fell 67 cents. Movement was decent at 179 loads.
  • Meanwhile, showlist estimates are sharply higher in Nebraska this week, but down in Texas, Kansas and Colorado.
  • Traders are also beginning to prepare for Friday's Cattle on Feed Report, which is expected to show all categories well below year-ago levels, with Placements expected to come in at 91.6% of last year.
  • Modest strength in the corn market is putting light pressure on feeder cattle futures.

 

Lean hog futures are posting slight losses in most contracts.

  • Lean hog futures are seeing light followthrough selling today.
  • But pressure is being limited by strength in the product market yesterday and uncertainty as to whether a top is in the works. The front-month contract remains at around a $5 discount to the cash hog index.
  • The pork cutout value firmed $1.96 yesterday on strong movement of 405.12 loads.
  • Near-term supply tightness due to heat the first half of September is expected to result in steady to $1 higher cash hog bids today, despite negative packer cutting margins.
     
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