Market Snapshot, Noon CT -- (VIP) -- December 30, 2013

December 30, 2013 05:55 AM


Corn futures continue to trade 3 to 4 cents lower in thin trading.

  • The combination of disappointing export inspections and favorable precipitation in South America has corn futures lower in light end-of-year trading.
  • Today's weekly export inspections report disappointed traders as it came in at 24.9 million bu., below expectations and down 12.35 million bu. from the previous week.
  • Both Argentina and Brazil saw favorable amounts of precipitation over the weekend although not all key production areas received moisture. Forecasts for Argentina call for more hot temps, but not excessive heat, as well as some timely rains over the next 10 days.
  • Weakness in the U.S. dollar index is helping to limit selling pressure for the corn market.
  • News that Mexico's decision to restart import duties on white corn and sorghum will NOT apply to U.S. products due to the North American Free Trade Agreement is also limiting selling.
  • Gulf basis is 5 cents for immediate delivery, 3 cents higher for January and February delivery and steady for deferred delivery in midday trading, which could signal current price weakness is attracting export business..

Soybean futures continue to post double-digit losses in the March through August contracts and 9-cent losses in January futures.

  • Soybean futures under pressure due to weekend rains in South America and disappointing weekly export inspections.
  • Futures are again testing support at the bottom of the trading range that has bound action throughout the month.
  • USDA's weekly export inspections report showed 43.182 million bu. passing inspections for the week ending Dec. 26. This was down 12.1 million bu. from the previous week and below trader expectations.
  • Expectations for a record-large South American crop continue to weigh on prices, but strong exports tend to support prices. Hence the weakness today on the lower-than-anticipated inspections.
  • The markets have shrugged off news of a 35,000-MT soybean oil sale to an unknown destination for 2013-14, as soyoil futures are also under pressure today.
  • Gulf soybean basis continue to remain steady in late-morning activity.

Wheat futures are down 4 cents in the SRW wheat market, while HRW is down 4 to 7 cents and HRS wheat is 2 to 3 cents lower.

  • Wheat futures are lower on spillover from the corn market and disappointing export sales.
  • USDA's export inspections report came in at 13.396 million bu., which is under trader expectations and down 6.1 million bu. from the previous week.
  • Meanwhile, Russia's ag minister says the country's 2013 wheat crop of 54.4 MMT is up 37% from the previous year, which reminds of increased global competition with U.S. supplies.
  • Some early talk surfaced of winterkill risk rising this week as mild temps late last week eroded snowcover in some areas, but traders remain more focused on the negative chart patterns and U.S. wheat's uncompetititve position in the global market.
  • Gulf SRW wheat basis is steady for immediate and January delivery and 4 to 5 cents higher for February and March delivery, which has some traders looking for a pick up in export news next week.

Live cattle futures are choppy with February futures up marginally and April futures down marginally. Feeder cattle futures are slightly weaker.

  • The posting or record high cash cattle prices in Texas and Nebraska on Friday continue to be supportive to futures this morning but with futures already in line with cash trade buying interest is limited.
  • Some traders are looking for cash prices to firm this week as the bitter cold across the nation's northern tier limits marketing.
  • Cash trade was active last week despite the high prices, signaling showlists were likely cleaned up.
  • Boxed beef prices surged this morning with Choice up $2.33 and Select up $3.30 but movement is a light 67 loads.
  • Light profit-taking continues to dominate feeder cattle futures today.

Lean hog futures continue to trade slightly to moderately higher this morning, with the exception is April futures which is marginally lower.

  • Lean hog futures, especially the deffered contracts, are higher on the friendly Hogs & Pig (H&P) Report which showed the Dec. 1 U.S. hog inventory was down a bit more than expected from year-ago levels.
  • USDA also made a number of bullish revisions to the past two years of inventory data.
  • Nearby contracts are finding some limited support from today' gain of 88 cents in the pork cutout value and solid movement of 237.47 loads. But this small gain recovers only about a third of the sharp loss posted Friday.
  • The cash hog index was most recently projected higher for the first time in an extended period. However, it remains nearly $7 below the front-month, which is limiting buying interest.
  • Early cash hog bids are mostly steady as some packers are in need of supplies. Frigid conditions in the upper Midwest makes producers unwilling to transport hogs.
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