Market Snapshot, 10:00 am CT (VIP) -- September 25, 2013

September 25, 2013 05:12 AM
 

Corn futures have seen mixed trade at times, but most contracts are currently 2 to 4 cents higher.

  • Corn futures are finding support from short-covering this morning amid ideas the downside has been pressed hard enough for now.
  • Two daily sales announcements this week and weekly export data signals lower prices are rebuilding demand.
  • Gulf basis firmed 2 cents for immediate delivery this morning, signaling more such demand news may be ahead.
  • But mild, dry weather is encouraging a pickup in Midwest harvest activity, which is making it tough for bulls to gain any traction.
  • Lanworth raised its 2013-14 world corn production forecast today by 7 MMT to 949 MMT on expectations for a large South American crop.
  • Ethanol production for the week ended Sept. 20 fell 6,000 barrels per day (bpd) to 832,000 bpd. Weekly ethanol stocks fell 565,000 billion barrels to 15.61 million barrels.

 

Soybean futures have softened to trade mostly 2 to 6 cents lower.

  • Soybean futures are under pressure amid spread unwinding with the corn market.
  • With harvest getting started in the Corn Belt, beans are seeing light pressure today. But ideas early results from the earliest planted beans will be the best are helping limit pressure.
  • News Lanworth raised its 2013-14 world soybean production of 284 MMT, up 3 MMT from its previous forecast on expectations for an increase in South American soybean plantings is also encouraging light selling.
  • USDA announced a 140,000 MT daily bean sale to unknown destinations for 2013-14 delivery this morning, which is helping limit pressure.

 

Wheat futures are enjoying double-digit gains in most contracts, with HRS wheat leading the charge with nearby contracts mostly 10 to 14 cents higher.

  • The wheat market is again benefiting from concerns about freeze damage to the Argentine wheat crop. This adds to talk China and Brazil may be shopping around for wheat.
  • HRS futures are leading the rally thanks to indications Canada's spring wheat crop has lower-than-normal protein levels.
  • Recent news on the export front has signaled U.S. wheat is indeed competitively priced and the recent price break in the U.S. dollar index could make U.S. supplies even more attractive.

 

Live cattle futures are steady to slightly higher. Feeder cattle futures are narrowly mixed.

  • Live cattle futures are extending yesterday's gains as both the fundamentals and technicals favor market bulls.
  • Showlist estimates are down this week and boxed beef prices have strengthened. However, beef movement dropped off notably yesterday, signaling retailers are resisting higher prices.
  • These factors plus the premium traders have built into futures signals higher cash cattle trade is likely this week. Last week, sales took place at $124 in the Southern Plains.
  • The October contract moved above its 100-day Moving Average last week and is testing the 200-day Moving Average today. The December contract is above both these levels.
  • Strength in the corn market is encouraging light profit-taking in some feeder cattle futures.

 

Lean hog futures are posting slight to moderate gains this morning, with the front-month contract leading to the upside after a gap-higher start.

  • Lean hogs are seeing followthrough buying today.
  • The hog market continues to benefit from diminished supplies due to late summer/early fall heat and the Porcine Epidemic Diarrhea Virus (PEDV). This is evident both in recent cash strength and Monday's Cold Storage Report that showed much smaller than expected frozen pork supplies. Friday's Quarterly Hogs & Pigs Report will provide another read on this front.
  • Some packers have reduced kill hours to adjust to the tighter supplies. As a result, early cash hog bids are steady to lower.
  • Chart patterns still favor market bulls, though the market is nearing overbought territory.
  • The pork cutout value fell 49 cents yesterday and movement improved to 336.73 loads.
     
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