Market Snapshot, Noon CT -- (VIP) -- November 15, 2013

November 15, 2013 05:58 AM


Corn futures are steady to 4 cents lower at midday.

  • Traders are reducing risk exposure heading into the weekend. Spillover pressure from the bean market adds light pressure.
  • But selling is being limited by strong weekly corn export sales of nearly 1.203 MMT for 2013-14, which topped lofty expectations.
  • Also, Gulf basis has strengthened this week, signaling export demand remains strong.
  • But the harvest of a record 2013 corn crop makes it tough for bulls to gain any traction in the corn market. Also, Argentina is enjoying favorable planting weather.
  • Informa Economics reportedly trimmed its 2014 corn planted acreage projection by 154,000 acres to 91.546 million.

Soybean futures have softened to trade 23 to 26 cents lower through the August contract, with deferred months seeing losses in the teens.

  • Soybean futures have erased all of this week's gains as technical-based profit-taking is underway to wrap up the week. Nearby contracts moved through the psychologically significant $13.00 mark this morning.
  • Favorable weather to start the Brazilian bean growing season is also pressuring the market.
  • The market is also exhibiting some disappointment this morning's weekly soybean export sales of 848,500 MT for 2013-14 and 60,600 MT for 2014-15 "only" matched expectations. Traders are ignoring highly impressive exports in excess of 2.065 MMT.
  • Similarly, traders are ignoring impressive crush data. NOPA reports soybean crush in October of 157.06 million bu., which was nearly 3 million bu. stronger than expected. Soyoil stocks came in at 1.356 billion lbs., which was lighter than expected.
  • Similarly, news Informa Economics reportedly trimmed its 2014 soybean planted acreage forecast to 83.8 million acres from 83.9 million acres is getting little attention.

Wheat futures have softened a bit to trade mixed in the SRW market and slightly lower in the HRW and HRS wheat markets.

  • Spillover in the corn and soybean markets is pressuring the wheat market to wrap up the week. Plus the technical posture of the wheat markets remain fully bullish.
  • The U.S. winter wheat crop is off to a favorable start, which traders expect USDA to confirm on Monday.
  • Also, this morning's weekly export sales report confirmed ideas U.S. wheat is losing out on export business, as wheat sales fell short of expectations at 287,800 MT for 2013-14 and 900 MT for 2014-15.
  • News Ukraine's prime minister expects the country to harvest a record 61 MMT grain crop this year adds light pressure as it reminds of stepped up global competition.

Live cattle futures have improved to trade mixed on news of cash trade beginning. Feeder cattle futures are slightly higher.

  • Nearby live cattle futures are seeing a lift from news that cash cattle trade has begun in Texas at $132, which is up $1 from last week.
  • Expectations are for trade to build at $1 higher levels across the Plains this afternoon.
  • Packers were forced to raise bids due to the overall tightness of marketings and improved beef movement, although this week's showlist was up slightly from last week.
  • This morning, Choice cuts slid $1.36 and Select fell 28 cents on decent movement of 83 loads.
  • Traders are comfortable with December live cattle trading at around a $1 premium to the start of this week's cash trade given tight supplies.
  • Softer corn prices are giving bulls the advantage in feeder cattle futures.

Lean hog futures continue to enjoy slight gains this morning.

  • Ideas the downside was overdone yesterday continues to lift the lean hog market.
  • Expectations for this weekend's kill continue to grow as wide profit margins are giving packers incentive to ramp up production.
  • But expanding supplies means the cash hog market is steady to lower again today. The cash hog index continues to slide. December lean hogs are at more than a $1 premium to the index.
  • The pork cutout value slid $1.62 this morning, which encouraged strong movement of 207.45 loads. While pork prices have generally softened this week, this has led to consistently strong movement.
  • A weaker U.S. dollar index and gains in the stock market add light support.
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