Market Snapshot, Noon CT (VIP) -- August 30, 2013

August 30, 2013 06:50 AM

Corn futures continue to face pressure with September down 5 cents and deferred months 1 to 2 cents lower.

  • Perceptions cooler temperatures and increased rain chances are ahead for the Midwest has traders on the negative side of today's trading.
  • In addition, traders are evening positions ahead of the long holiday weekend.
  • While the trade is thinking relief from the intense heat is on the way, it is expected to remain extremely hot in the Midwest until Sunday. That's when milder temps are forecast to arrive. However, limited precip is expected and heat is forecast to build again in the upper Midwest and western Corn Belt next week.
  • Today's action has prices probing support in Monday's gap. It will take a drop to $4.74 1/2 to close the gap for December corn.
  • International Grains Council raised its 2013-14 world corn production forecast by 3 MMT to 945 MMT due to an anticipated increase in U.S. production.
  • Gulf basis is unchanged for all delivery periods through December after dropping 20 cents for August delivery to $1.00 over September futures this morning. Basis slid 5 cents for September delivery and it was steady to 3 cents higher for deferred delivery. Traders view the widening basis as signs of a decline in demand.
  • The stronger U.S. dollar index is seen as a negative as well.


Soybean futures are 6 to 14 cents lower this morning through the July contract.

  • Profit-taking is the main feature of this morning's trade as traders even positions ahead of the Labor Day weekend and close the books on August.
  • The stronger U.S. dollar index is also pressuring prices.
  • Weather continues as the key uncertainty but a decline in temperatures is forecast to move into the Midwest on Sunday and the eastern Belt is even expected to see below-normal temps Sept. 4-8.
  • While some precipitation is included in the late-weekend forecast, the extended forecast calls for below-normal precip chances for the entire Corn Belt.
  • Traders continue to ignore USDA's announcement of a 110,000 MT soybean sale to China for 2013-14.
  • November soybean prices are probing support at the top side of Monday's gap, which provides support at $13.48.
  • Gulf basis in unchanged in late-morning trading. Early today it firmed 5 cents for August and early September delivery and 3 cents for last half September delivery. The firmer basis this morning is seen as a positive sign for demand.


SRW and HRW wheat futures are fractionally to 3 cents higher while HRS is mixed.

  • Corrective short-covering ahead of the Labor Day weekend continues, although some support is coming on news of crop problems in Australia and Argentina.
  • Weakness in corn futures is limiting gains, however.
  • Also limiting buying interest is news International Grains Council raised its world wheat production forecast by 4 MMT to 691 MMT as it anticipates production gains in Canada, the EU and Ukraine.
  • News Pakistan imported 92,108 MT of Russian wheat -- the first purchase in three years -- reminds that U.S. wheat is facing stepped up export competition.
  • Gulf basis is unchanged in late-morning trading after firming 4 cents for immediate delivery this morning, but slipping 5 cents for October. Other months held steady.


Live cattle futures are narrowly mixed, while feeder cattle futures are moderately higher.

  • Traders continue to even positions ahead of the long weekend.
  • They are also waiting for cash trade activity to gain momentum. The market received some support from light cash trade in Kansas at $123, which is steady with last week's action.
  • The boxed beef market eased lower this morning with Choice down 3 cents and Select down 72 cents. Movement is a light 82 loads.
  • Declines in corn futures are lifting feeder cattle futures.


Lean hog futures are narrowly mixed.

  • Trading interest is light ahead of the long holiday weekend.
  • The cash market is providing some pressure as cash hog bids are trending lower. However, packers are still cutting the black and the intense heat is trimming average market weights.
  • The pork cutout value fell another $1.57 today with movement a moderate 180 loads.
  • Cash prices have fallen 10 days in a row, narrowing the spread between October futures and the cash index to about $7. That spread had been as much as $15 earlier this month.


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