Market Snapshot, Noon CT (VIP) -- August 2, 2013

August 2, 2013 07:02 AM
 

Corn futures have slipped into negative territory after posting slight gains early. September futures are around 9 cents lower and deferred contracts are down 2 to 3 cents.

  • Futures have slipped lower after rising early on short-covering as attitudes are bearish.
  • The absence of any threatening weather has traders remaining negative. They view weather forecasts calling for below-normal temps and increased chances for precipitation through the first half of August as positive for pollination and ear development. The only risk remaining is whether or not the crop makes it to full development before the growing season ends and that's too far in the future to gain much worry currently.
  • FC Stone pegged the U.S. corn crop at 13.993 billion bu., with a yield of 157 bu. per acre. USDA's first survey-based crop estimate will be released Aug. 12.
  • The weaker U.S. dollar index, prompted by the disappointing employment data is offering limited support for corn futures.
  • Gulf basis is unchanged in late-morning trading.

 

Soybean futures have shifted back into the negative column with September beans down around 12 cents and new-crop futures down 3 to 4 cents.

  • Futures originally moved higher on short-covering, pre-weekend position squaring and a weaker U.S. dollar index. The market is also got some support from FC Stone's latest estimate of the U.S. soybean crop. It pegs the crop at 3.309 billion bu., with a yield of 43 bu. per acre. USDA's first survey-based crop estimate will be released Aug. 12.
  • But selling pressure return as traders continue to view weather forecasts as favorable for the growing crop.
  • Gulf soybean basis is unchanged in late-morning trading after declining 5 cents for first half August delivery in the early morning trade.

 

SRW, HRS, and HRW wheat futures are mildly firmer in all but some of the extreme far-deferred contracts.

  • Winter wheat futures continue to try to mount a post-harvest rally but are struggling to do so as selling pressure returns to soybean and corn futures.
  • The weaker U.S. dollar index due to the disappointing jobs data is providing some support to wheat futures this morning as it makes U.S. wheat more competitive, though Black Sea origin wheat remains cheaper
  • Traders continue to view weather forecasts as positive for the spring wheat crop.
  • Gulf SRW basis is unchanged after slipping 1 cent for immediate delivery in early morning trade.

 

Live cattle futures are favoring the upside while feeder cattle futures are mixed.

  • Live cattle futures are mostly firmer in light trading ahead of the weekend.
  • Traders continue to look for cash cattle and wholesale beef to trend higher as temperatures cool and retailers line up supplies for Labor Day featuring but are disappointed cash prices are trading steady with week-earlier levels in light trading in the Southern Plains.
  • Choice boxed beef is 12 cents higher this morning but the Select is down 54 cents. Movement is a moderate 105 loads.
  • The weaker U.S. dollar index continues to provide some support for the cattle complex.
  • The weakening of corn futures has feeder cattle futures turning back to the plus side.

 

Lean hog futures continue to trade higher in bull spreading.

  • Steady cash hog prices and a surge in wholesale pork has led to moderate gains in the lead August contract and slighter gains in deferred contracts.
  • The pork cutout value is $2.51 higher this morning. Movement is a decent 163.4 loads.
  • Traders continue to bulls pread the complex as they expect hog supplies and hog weights to rise heading into fall while wholesale prices weaken seasonally.
     
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