Market Snapshot, Noon CT -- (VIP) -- October 17, 2013

October 17, 2013 07:04 AM

Corn futures are about a penny higher in nearby contracts.

  • Corn futures are being supported by the steep drop of the U.S. dollar index.
  • Market activity continues to remain light as traders wait for USDA to begin releasing trade data.
  • USDA canceled the October Crop Production and Supply & Demand Reports.
  • Meanwhile Reuters reports corn exports for the three weeks ending Oct. 10 may have totaled 2.24 MMT, up sharply from last year's 508,000 MT exported during the same period a year ago. China, Japan and Mexico are cited as the featured buyers.
  • Private consulting firm Shanghai JC Intelligence Co. says China has purchased around 1.2 MMT of U.S. corn so far this month, which is well above earlier reports.
  • Gulf basis is reported 1 to 3 cents higher barge basis to New Orleans is quoted as firmer which has traders thinking more demand news may be on the way, soon hit the market.
  • Buying interest is being limited by the ongoing harvest which has likely not yet reached the 50% completed level. This suggests harvest-related hedge pressure could still build. December corn futures have so far failed to take out yesterday's high as a result.

Soybean futures are 5 to 15 cents higher with the November contract leading gains.

  • Soybean futures are higher on the steep decline in the U.S. dollar index and expectations the reopening of the federal government could yield positive export demand news.
  • Gulf soybean basis information is not available today, but other barge basis rates to New Orleans are slightly firmer, which is viewed as positive.
  • Reuters reports total soybean exports may have reached 2.86 MMT during the three weeks running up to Oct. 10. That compares to exports of 2.35 MMT during the comparable period a year ago.
  • China's weekly soybean auction of state reserves attracted slightly better demand as end users bought 56.3% of soybeans put up for auction.
  • Traders believe harvest has crossed the halfway mark this week, which could mean hedge pressure will ease. The first official harvest update from USDA will not be until next Monday.
  • November soybean futures are trading at their highest level since Oct. 11, but resistance starts at $13.00.

Wheat futures are stronger with SRW up 5 to 9 cents, and HRW and HRS futures up 1 to 7 cents. Nearby contracts are leading gains.

  • Wheat futures are higher on the weakness in the U.S. dollar index as traders believe it helps to make U.S. wheat more competitive globally.
  • Reuters report traders believe a total of 1.55 MT of wheat moved through exports during the three-week period ending Oct. 10 which compares to 967,000 metric tons shipped during the same period a year earlier.
  • News Ukraine's ag minister says the country's winter grain losses will be less severe than originally thought at 1.24 million acres is limiting gains.
  • But, lingering concerns about Argentina's wheat crop battle with drought and frost in seen as supportive.
  • As a result, countries such as China are thought to be increasing U.S. wheat and corn buys.

Nearby live cattle futures gapped higher on the open and are enjoying slight to moderate gains. Feeder cattle futures are also slightly to moderately higher.

  • Cattle futures are higher on reports of higher cash bids being paid in the Southern Plains and Nebraska. Private sources indicate cash cattle traded at $128 to $129 yesterday in Texas, which is steady to $1 higher compared with the week prior. A few cattle were also purchased in Kansas at $2 higher on a dressed basis. And private reports out of Nebraska indicate deals being done at $131.00, up sharply from last week's $126.00 to $128.50 range.
  • Tighter supplies are lifting cash bids.
  • Wholesale market data is still lacking from USDA but private reporter Urner Barry yesterday showed Choice cuts up 32 cents to $194.88 per cwt. and Select up 43 cents to $176.60 per hundred weight.
  • Urner Barry also indicates today's cattle slaughter will total 121,000 head, down from last week's 122,000 and 123,166 head a year ago.
  • USDA announced it will postpone the Cattle on Feed Report that was scheduled to be released Friday, but it has not yet made a decision as to when the report will be released.
  • Sharp weakness in the U.S. dollar index, expectations the COF Report will confirm tight calf supplies and strong live cattle futures are lifting feeder cattle futures.

Lean hog futures have turned mixed, with nearbys firmer amid spreading.

  • Traders are taking profits after futures gapped higher at the open.
  • The charts still favor the bulls, however, which is counter the usual seasonal trend. Traders are cautious as a result.
  • Weakness in the U.S. dollar index is limiting pressure.
  • Supplies are thought to less readily available heading into the weekend and packers are planning a large Saturday kill. This has cash hog bids mostly steady.
  • Urner Barry projects today's hog slaughter at 430,000 head, which is down from last week's 432,000 head but about even with last year's 430,315 head.
  • Urner Barry reports the pork cutout value rose around 2 cents yesterday. USDA has not yet updated its pork cutout data.
  • Traders continue to target the October contract's expiration price of $90.62 in the absence of the CME lead hog index.
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