Market Snapshot, Noon CT -- (VIP) -- November 8, 2013

November 8, 2013 06:37 AM

Corn futures are 1 to 2 cents higher through the March 2015 contract.

  • Corn futures are slightly higher on mild short-covering as USDA's crop production and carryover figures came in slightly lower than anticipated, though the crop is still seen as record-large and carryover is projected to increase sharply.
  • Limiting gains is the still-bearish fundamental outlook A stronger U.S. dollar index, which is higher in reaction to today's jobs report that came in better than expected, is also limiting buying interest.
  • Harvest is rolling again after the early week delay, but traders view harvest as winding down and do not expect a new wave of harvest-related hedge pressure.
  • Brazil's Conab raised its estimate of the country's 2013-14 corn crop to a range of 78.5 MMT to 79.8 MMT, up from it's previous forecast of 78.4 MMT to 79.6 MMT.
  • Gulf corn basis is unchanged in late-morning trading.

Soybean futures are 12 to 24 cents higher through the August contract with January soybeans leading gains.

  • Soybean futures surged as USDA's carryover estimates came in lower than pre-report expectations.
  • Traders are shrugging off the stronger U.S. dollar index.
  • According to official customs data, China imported 4.19 MMT of soybeans last month, down 11% from the previous month. Year-to-date imports of 49.9 MMT are up 3.3% from year-ago.
  • Meanwhile, Conab raised its Brazilian bean crop estimate to a record 87.9 MMT to 90.2 MMT. Last month the agency pegged the crop between 87.6 MMT and 89.7 MMT.
  • Gulf soybean basis is unchanged in late-morning trading.

All flavors of wheat are weaker with SRW steady to 2 cents lower, HRW 2 to 4 cents lower and HRS 3 to 5 cents lower.

  • All wheat flavors are favoring a weaker tone as USDA boosted projected carryover. Traders were expecting a smaller carryover projection.
  • Strength in the U.S. dollar index is adding to the pressure as it makes U.S. wheat prices less competitive on the global market.
  • The U.S. dollar index is stronger on this morning's monthly employment report which showed 204,000 non-farm payrolls were added in October, coming in above expectations.
  • Gulf SRW wheat basis was unchanged in late-morning trading.

Live cattle futures continue to trade slightly higher. Feeder cattle futures are mixed.

  • Live cattle futures continue to trade higher on mild short-covering.
  • December live cattle are currently trading about a $1.50 premium to cash prices paid yesterday in the Plains, which suggests traders remain bullish.
  • Limiting gains is news Choice boxed beef fell 89 cents and Select slipped 31 cents this morning. Movement was poor at just 63 loads.
  • After trading moderately higher earlier, feeder cattle futures are now mixed on the rise in grain futures after USDA's November crop reports.
  • USDA pegs the 2013 cash steer price at $125.69 and raised its 2014 projection to $126-$137. USDA also raised its 2013 beef export projection.

Lean hog futures continue to trade slightly higher.

  • Lean hog futures are higher amid pre-weekend position squaring, but early gains have been trimmed, filling the gap left on the open.
  • Limiting buying interest is news the pork cutout value slipped 26 cents on modest movement of 188.79 loads.
  • But packer profit margins are positive and cash hog prices are steady as a result. But packers won't have to lift prices to fill slaughter needs as hog runs are more than ample.
  • USDA pegs 2013 cash hog price at $74.77 and raised its 2014 projection to $59-$63. USDA trimmed its 2013 and 2014 pork export pegs amid tighter supplies.
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