Market Snapshot, Noon CT -- (VIP) -- November 21, 2013

November 21, 2013 05:55 AM

Corn futures are 2 to 5 cents higher, with nearbys leading gains.

  • Better-than-expected export sales and a weaker dollar have prompted short-covering this morning.
  • Weekly export sales of 945,100 MT for 2013-14 and sales of 37,600 MT for 2014-15 topped expectations for the week ended Nov. 14. Traders theorize more strong sales could be ahead as price have softened since Nov. 14.
  • Futures are gaining some support on the realization EPA's proposed reduction in the corn-for-ethanol blend requirement may not mean a cut in ethanol production as ethanol producers are enjoying strong margins.
  • But the technical posture of the market still favors market bears and farmers are wrapping up the harvest of a record-large crop, which will continue to temper buying enthusiasm.
  • Gulf corn basis is reported as steady in late-morning trading.

Soybean futures are posting gains of 5 to 9 cents through the August contract. Far-deferred months are seeing 1- to 4-cent gains.

  • Today's strong export sales tally coupled with the weaker U.S. dollar has soybean futures moving higher.
  • Today's Weekly Export Sales Report showed sales in excess of 1.376 MMT for 2013-14, which topped expectations by a wide margin. Exports of nearly 2.489 MMT were even more impressive.
  • The report, which featured China as the lead buyer, also quelled rumors the country had canceled recent soybean buys.
  • Gulf soybean basis is steady in late-morning trading after being down 2 to 4 cents for near-term delivery in early morning action.

SRW wheat is mixed, with HRW and HRS marginally to 1 cent lower.

  • The strong Weekly Export Sales Report along with gains in corn futures and a weaker U.S. dollar index provided an early boost to wheat futures, but buying has given way to selling.
  • Weekly export sales of 618,100 MT for 2013-14 topped expectations and improved from recent weeks.
  • Also, Japan included 51,556 MT of U.S. wheat in its weekly tender for 133,480 MT of milling wheat.
  • Gulf SRW wheat basis is steady in late-morning trading.
  • The expansion of drought across the South is being ignored as the winter wheat crop will enter dormancy in much better shape than last year.

Live and feeder cattle futures are favoring a firmer tone in mixed trade.

  • Position squaring ahead of Friday's Cattle on Feed Report has futures favoring the upside.
  • December futures are testing the small gap left at $131.80 market on Tuesday.
  • Private sources now indicate some light cash trading is occurring in the Southern Plains at $131, which is down $1 from last week.
  • Traders expect the monthly Cattle on Feed Report will show On Feed at 94.2%, Placements at 110% and Marketings at 101.5% of year-ago levels.
  • Choice boxed beef fell 87 cents and Select dropped $1.69 this morning but movement is a strong 147 loads.
  • Beef export sales for the week ended Nov. 14 were also impressive at 16,600 MT for 2013 and 5,200 MT for 2014.
  • Traders are also preparing for tomorrow's Cold Storage Report. Pre-report expectations are for frozen beef stocks at the end of October to come in around 447.8 million lbs., up 1% from the previous month and 4.4% above year-ago levels.
  • Feeder cattle are fractionally mixed on the firmer corn market.

Lean hog futures are slightly weaker with the exception of the lead December contract which is pivoting around unchanged.

  • Cash prices continue to edge lower as hog supplies continue to rise. But cutting margins are strong and packers are keeping kill lines running near capacity, which is moderating the decline in cash prices.
  • The pork cutout value continues to decline. It slipped 56 cents this morning but movement is a strong 245.48 loads.
  • Weekly pork export sales also rose over the week prior to 9,000 MT.
  • Traders are also readying for Friday's Cold Storage Report, which is expected to show frozen pork stocks around 565.5 million lbs., slightly below the month prior and down 6.3% from last year's October figure.
  • The wide premium December lean hogs carry versus the cash hog index is limiting gains in that contract.
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