Market Snapshot, Noon CT -- (VIP) -- September 16, 2013

September 16, 2013 07:01 AM

Corn futures are 1 to 3 cents lower on spillover from soybeans.

  • Corn futures started the day session slightly stronger as traders unwound long soybean/short corn spreads. But futures eventually moved to the negative after the initial wave of unwinding ceased and soybean moved lower on improved weather prospects.
  • The cooler weekend temperatures and forecasts for more rain to move across the Corn Belt midweek is psychologically negative for the corn market although the precipitation is too late to help the vast majority of the corn crop.
  • The corn market needs fresh demand news to signal prices have dropped far enough.
  • It got some positive export news this morning, but so far traders are ignoring it. Today's export inspections report shows total inspections of 20.111 million bu., which is 10 million bu. higher than the previous week and well above trader expectations.
  • Gulf corn basis is unchanged in late-morning trading.

Soybean futures are 20- to 30-plus cents lower in nearby contracts.

  • Traders view the weekend's cooler temperatures and precipitation as well as forecasts for more precipitation later this week as positive for crop development for late-developing beans.
  • As a result, they unwound long soybean/short corn spreads are pressed futures lower from the outset of trading.
  • The decline began with a gap-lower opening at the start of the overnight session. That triggered follow-through technical selling. November futures are again testing support at support at recent lows at the $13.40 area, which rests about the Aug. 26 gap area.
  • This morning's export inspections report from USDA showed total inspections of 2.972 million bu., up marginally from last week and within expectations.
  • Adding to the selling pressure is news the NOPA crush fell to 110.5 million bu. during August, under 116.3 million bu. in July and down from 124.8 million bu. in August of 2012. However, traders note that given the extremely tight level of 2012-crop carryover supplies, a small crush total was expected.
  • Gulf soybean basis is unchanged in late-morning trade after seeing gains of 1 to 5 cents in early trading.

All wheat flavors are favoring the negative side in fractionally mixed trading.

  • Corrective buying is supporting wheat futures this morning along with declines in the U.S. dollar index.
  • But the sharp declines in soybean futures, which have taken corn futures from the plus column to the negative column, are weighing on wheat futures.
  • Recent precipitation along with forecasts for more rain for dry areas of the Plains is seen as negative for wheat futures as the moisture improves conditions for seeding the 2014 HRW crop in the Plains. Some producers comments soil moisture conditions are some of the best they have been in years.
  • Futures are gaining only limited support from today's export inspections reports, which shows 46.024 million bu. being inspected. This is up 14.4 million bu. from the previous week and well above trader expectations.
  • Gulf SRW basis is unchanged in late-morning trading.

Live cattle are feeder cattle futures are slightly higher at midday.

  • Traders are leading to the positive side as they react positively to last week's cash cattle trade at $123 in the Plains last week, which was better than expected. Seasonal trends support higher beef and cattle prices in the fall and traders continue to look for signs cash prices have bottomed.
  • The October live cattle futures is gaining only mild support from the steady cash bids as it is a $2-plus premium to the cash market.
  • The dressed beef market is providing little direction this morning with Choice boxed beef up 21 cents, Select down 37 cents and movement a tepid 77 loads.
  • Feeder cattle futures are higher on the downturn in corn futures.

Lean hog futures are slightly to moderately higher on tighter-than-expected supplies.

  • Steady to stronger cash hog prices are supporting futures this morning.
  • October futures are gaining some support as they trade at a $2-plus discount to the cash index.
  • However, cash hog prices and pork cutout values normally trade lower in the fall and traders remain skeptical about how much more packers will pay for cash hogs.
  • With temperatures cooling, traders worry both numbers and average weights will rise seasonally.
  • The dressed pork market is cited as a negative with the pork cutout value dropping $3.46 this morning. Movement is a solid 188.66 loads, however.
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