Market Snapshot, 10:00 am CT (VIP) -- September 6, 2013

September 6, 2013 05:05 AM
 

Corn futures are mostly 1 to 3 cents higher this morning, with the exception of the September contract which is lower.

  • Light short-covering is lifting the corn market ahead of the weekend.
  • But that is largely the extent of buying interest as the market remains relatively unconcerned about stressful Corn Belt weather as traders still expect a record-large crop.
  • Also, this morning's Weekly Export Sales Report was uninspiring as USDA reported net sales reductions of 113,200 MT for 2012-13 and sales of just 328,300 MT for 2013-14, which was well below week-ago and expectations.
  • Heat and mostly dry Midwest weather is expected to result in additional crop condition rating declines in USDA's update Monday.
  • Widespread heat in the 6- to 10-day outlook points to continued accelerated crop development that will drawn down yields. Above-normal precip is forecast for Indiana and Ohio, but the rest of the Midwest is expected to see normal to below-normal precip.

 

Soybean futures are seeing some bull spreading with the front-month up 3 cents and deferred months down 3 to 5 cents.

  • Soybeans saw light short-covering overnight, but the market has shifted gears to profit-taking and risk reduction ahead of the weekend.
  • Recent and ongoing heat in the Corn Belt is stressful for the filling crop, especially with just scattered showers in the five-day outlook and below-normal precip expected for the western Corn Belt for Sept. 11-15.
  • This morning's Weekly Export Sales Report reflects continued strong demand for new-crop beans. USDA reported sales of 5,100 MT for 2012-13 and 844,100 MT for 2013-14, which matched expectations.
  • Stats Canada data revealed canola stocks as of July 31 fell to 608,100 MT -- the lowest level in 15 years and well below expectations for 730,000 MT.

 

SRW and HRW wheat futures are mostly 1 to 4 cents higher, while HRS wheat is mixed with an upside bias.

  • Strength in the corn market and sharp losses in the U.S. dollar index are supporting wheat futures ahead of the weekend.
  • Also, this morning's Weekly Export Sales Report reflected solid demand for U.S. supplies. USDA reported sales of 668,400 MT for 2013-14 and 79,000 MT for 2014-15, which topped expectations.
  • But somewhat offsetting this is news Egypt again turned to cheaper Black Sea region supplies to fulfill its tender. It bought 60,000 MT of Romanian wheat.
  • Light support also comes from news Stats Canada reports total wheat stocks as of July 31 came in at their lowest level in five years at 5.057 MMT, which is down 875,000 MT from year-ago and slightly below expectations.

 

Live cattle futures are posting slight losses to start the session, while feeder cattle futures are seeing slight to moderate losses.

  • Nearby live cattle futures remain at around a $2 premium to last week's cash cattle trade, giving traders little incentive to buy ahead of the weekend amid cash trade uncertainty.
  • While showlist estimates are tighter this week and boxed beef movement has picked up notably, demand concerns continue to hang over the market.
  • Disappointing jobs data today adds to concerns that consumers will resist historically high beef prices.
  • Trade is not expected until late today as bids and asking prices remain far apart.
  • Limiting pressure are signs of strong export demand. USDA today reported beef export sales of 17,900 MT for the week ended Aug. 29. These strong sales were down from last week's impressive tally of 23,500 MT.
  • This follows news U.S. Meat Export Federation analysis of USDA data indicates beef exports hit their highest level of the year in July and that exports so far this year are up in both volume and value over year-ago.
  • Firmer corn prices are encouraging followthrough selling in feeder cattle today.

 

Lean hog futures are slightly to moderately higher in light trade.

  • Atypical supply tightening continues to support the cash hog market and lean hog futures today. Recent and ongoing heat that is expected to continue next week in the Midwest has limited hog weight gains. Early cash hog bids are mostly steady.
  • Also supportive is this week's strong pork movement. Yesterday 479.6 loads changed hands. The pork cutout value fell 36 cents, but this was an improvement from steep declines that morning.
  • Weakness in the U.S. dollar index is also mildly supportive, as is the market's bullish technical stance.
  • Also, the October contract remains at a slight discount to the cash hog index.
     
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