Market Snapshot, Noon CT -- (VIP) -- September 13, 2013

September 13, 2013 06:49 AM

Corn futures are 7 to 8 cents lower ahead of expiration of the September contract.

  • Corn futures remain under pressure due to the bearish USDA reports released yesterday, weakening basis and position evening ahead of the expiration of the September contract, which is down 21 cents.
  • The better-than-expected projected harvest numbers released from USDA Thursday has futures traders on the defensive and basis level at interior markets moving lower. The declines in basis are coming as the trade adjusts to the higher supplies that will soon become available from new-crop harvest. Basis levels are declining the sharpest in the eastern Corn Belt where corn yields appear very favorable.
  • Gulf corn basis is steady for September through January delivery in late-morning trading, which suggests the export market is on hold for the moment.
  • December futures are again testing support near $4.57, which provided support yesterday and then launched the late-session rally. However, the upside potential is seen as limited with a record corn harvest expected.
  • Also providing some negative pressure are recent weather forecasts which include increased precipitation chances for the dry western Corn Belt.

Soybean futures are posting double-digit losses in all but the front-month contract that is 50-plus cents higher.

  • Traders continue to take profits after yesterday's strong gains in new-crop contracts.
  • Adding to today's negative trend are weather forecasts calling for cooler temperatures and increased chances of rain for the upper Midwest this weekend which are seen as favorable for crop development.
  • The expiration of the September futures contract at noon CT today is prompting a sharp rally in that contract.
  • Adding to today's negative tone for new-crop futures is the widening of basis levels on interior markets due to the pending start of harvest as negative. Some areas held basis levels unchanged but others widened basis by 10 to 20 cents.
  • Gulf soybean basis is unchanged in late-morning trade.

All flavors of wheat are down today with SRW down 9 to 15 cents, HRW down mostly 10 to 12 cents and HRS down 5 to 9 cents.

  • Selling pressure from corn futures and the setback in soybean futures are pressing wheat futures today.
  • Also adding to today's negative trade are recent rains and weather forecasts calling for more precipitation over the parched HRW wheat country. The precipitation will significantly aid winter wheat seeding in that area.
  • Traders continue to cite USDA's increase of global wheat supply projections in yesterday's reports as additional reasons to remain negative as U.S. wheat prices are viewed as uncompetitive on the global market.
  • The September contracts expires at noon today.
  • Gulf SRW basis is unchanged in late-morning trading.

Live cattle and feeder cattle futures continue to trade slightly higher.

  • Light short-covering and firmer cash cattle prices are lifting futures slightly this morning.
  • After bidding $121 in the Southern Plains and getting no takers, packers boosted their prices to $123 and cash cattle began trading. That left prices steady with a week ago.
  • Traders were seeing some positives in the positive wholesale beef movement this week. But movement is softer today with t 92 loads trading this morning. Choice boxed beef slipped 79 cents while Select beef eased 32 cents.
  • Traders expect index funds to complete their roll from the October to the December today.
  • Feeder cattle continue to gain support from lower corn futures.

Lean hog futures are choppy in late-morning trade.

  • Live hog futures feature choppy trade as traders continue to look for the seasonal downturn in wholesale pork and cash hog prices to begin, but the wholesale market continues to remain strong.
  • Pork cutout values rebounded $1.15 this morning after yesterday's decline. And movement surged to 221 loads after slowing sharply yesterday.
  • In addition, packers are paying steady to $1 higher to fill slaughter needs into Monday.
  • The cooler temperatures moving across the Corn Belt has traders looking for both hog runs and weights to move higher next week.
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