Market Snapshot, Noon CT -- (VIP) -- December 18, 2013

December 18, 2013 05:59 AM


Corn futures have turned lower after initial strength to trade 2 to 3 cents lower at midday.

  • Pressing futures lower is news private analytical firm Informa Economics boosted its projected 2014 corn plantings to 91.846 million acres, up from its earlier estimate of 91.546 million acres. USDA reports U.S. farmers planted 95.3 million acres to corn in 2013.
  • The U.S. Energy Information Administration reports ethanol production averaged 928,000 barrels per day (b/d) - or 38.98 million gallons daily, which is down 16,000 b/d from last week's 23-month high. Ethanol stocks stood at 15.6 million barrels, a 1.1% increase from last week and the highest since September.
  • Traders were working to evening positions ahead of the end-of-year holiday trading, but traders abandoned that strategy as futures slumped to their lows of the day.
  • Buying interest continues to be dampened by news reports China has rejected 500,000 MT to 600,000 MT of U.S. corn since mid-November due to the presence of unapproved GMO material. This is well above levels reported by Chinese quarantine officials.
  • Gulf corn basis is unchanged in late-morning trading.

Soybean futures are sharply lower after trading slightly higher initially. Nearby futures are posting double-digit losses.

  • Soybean futures shifted sharply negative in line with the downswing in corn futures leaving prices trading near their daily lows.
  • Traders shrugged off news private analytical firm Informa Economics had lowered its estimated of 2014 U.S. planted soybean acres. The firm reportedly pegs total plantings at 81.929 million acres, down from its previous estimate of 83.814 acres. But traders are reminded projected 2014 soybean plantings still have the potential to produce a record harvest and total planted acres, if achieved, will be up substantially from 2013's 76.5 million acre.
  • Strong export demand for U.S. soybeans remains an underlying bullish factor. The market will receive an update on this via tomorrow's Weekly Export Sales Report.
  • Gulf soybean basis is unchanged in late-morning action.

Wheat futures are lower on spillover from both corn and soybeans. SRW and HRW wheat futures are 3 to 7 cents weaker and HRS wheat is fractionally to 2 cents lower.

  • The very negative market attitude and technical picture for wheat continues to weigh on the market.
  • The slightly stronger U.S. dollar index today adds to that negative attitude along with spillover selling from both corn and soybean futures.
  • Traders continue to look at very large global wheat stocks and view U.S. wheat prices as not competitive. Prices will not firm until the market finds a price that rebuilds demand for U.S. wheat.
  • News private analytical firm Informa Economics raised its projected U.S. all-wheat planted acre estimate to 58.1 million acres from its previous estimate of 57.7 million acres added to the already negative tone in the market.
  • In addition, mild conditions on the Plains for the time being and the generally good condition of the winter wheat crop when it entered dormancy means traders have little concern about the U.S. wheat crop.
  • Gulf SRW wheat basis is steady at midday.

Live cattle futures continue to trade slightly weaker and feeder cattle futures are slightly to moderately weaker.

  • Cattle futures are on the defensive as traders continue to wait for guidance from the cash cattle market.
  • Traders are talking weaker wholesale demand but Choice boxed beef is up 50 cents today and Select is up 23 cents. More importantly, movement is a strong 127 loads.
  • The holiday trade is already appearing as showlist estimates are down significantly but packers packers are buying for a holiday-shortened week.
  • Traders are also reducing risk ahead of Friday's Cattle on Feed Report, which is expected to show On-Feed at 95.4%, Placements at 100.9% and Marketings at 94.6% of year-ago levels.
  • Profit-taking is weighing on feeder cattle futures.

Lean hog futures continue to post moderate, corrective gains.

  • Lean hog futures are higher on ideas the down turn in futures has been overdone.
  • But traders are disappointed in this morning's wholesale pork trade. The pork cutout is quoted as down $2.17. But movement is a strong 234.72 loads. That follows improved movement on Tuesday and has some thinking retailers may feature pork after the holidays.
  • Buying interest is largely seen as short-covering, however, as the cash hog market will likely remain under pressure over the near-term due to large supplies and strong average weights.
  • February lean hogs continue to trade at a $6 premium to the cash hog index, which limits buying interest..
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