Market Snapshot, Noon CT (VIP) -- December 10, 2013

December 10, 2013 06:06 AM

Corn futures are generally 1 to 3 cents lower following a "friendly" Supply & Demand Report.

  • Corn futures have turned lower after posting a slight initial updraft on the "friendly" Supply & Demand Report from USDA.
  • USDA decreased its 2013-14 carryover estimate to 1.792 billion bu., down from pre-report trade expectations of 1.861 billion bushels. But that figure is still a substantial increase over the 2012-13 carryover figure of 824 million bushels.
  • In addition, the trade was reminded of rising world stocks as USDA put the Argentine crop at 26 MMT, up slightly from the trade expectations of 25.583 MMT.
  • Light pressure impacted pre-report-release trading as Conab pegged Brazil's corn crop at 78.8 MMT, which compares to its previous forecast range of 78.5 MMT to 79.8 MMT.
  • Gulf corn basis is steady for immediate delivery, up 3 cents for January delivery and unchanged for deferred delivery in late-morning trading.
  • Technical traders shifted to the sell side when March futures failed to uncover buy stops when that contract touched last week's highs around $4.40.
  • Traders are shrugging off the weaker U.S. dollar index today.


Soybeans futures are 2 cents higher through the March contract, while deferred contracts are 2 to 7 points lower at midday.

  • Technical traders shifted into selling mode when March futures failed to attract buying interest when they traded above yesterday's high at $13.30.
  • Soybeans are also feeling spillover pressure from losses in corn and wheat futures.
  • Traders have shrugged off USDA's lowering of the 2013-14 carryover projection to 150 million bu., somewhat lower than the pre-report estimates.
  • In addition, USDA pegged world ending stocks at 70.62 MMT, slightly less than expectations. And it placed the Brazilian crop at 88 MMT, slightly under the pre-report estimates.
  • Pressure on deferred contracts appeared early today on news Conab raised its soybean production forecast to a record-large 90.03 MMT, which compares to its November forecast for production to come in between 87.9 MMT and 90.2 MMT.
  • Light soybean sales by farmers ahead of USDA's reports, strong crushing margins and slow loading times due to frigid temps are lifting basis levels at interior locations today.
  • Gulf soybean basis is 2 cents firmer for immediate delivery and unchanged for deferred delivery, signaling more export demand news may be ahead.


SRW and HRW wheat futures are posting losses of 5 to 10 cents this morning on the bearish USDA reports. HRS wheat is down 5 to 7 cents.

  • Wheat futures collapsed on news USDA increased its projection of total world wheat supplies more than the trade expected. USDA's Supply & Demand Report pegged total world stocks at 182.78 MMT, up versus pre-report expectations of 178.8 MMT.
  • Selling pressure is also coming on news USDA pegged the 2013-14 wheat carryover at 575 million bu., higher than its previous projection and well above pre-report expectations, which looked for a decrease.
  • Today's reports remind traders USDA wheat prices will face plenty of headwinds in the global market place.
  • The market is not overly concerned about freezing temps in winter wheat country as much of the crop is protected by either snow or ice cover.
  • Gulf wheat basis is unchanged in late-morning trading.


Live and feeder cattle futures are seeing light to moderate pressure this morning.

  • Profit-taking continues to dominate today's trade as cash negotiations are on hold.
  • The trade is operating without an update from USDA on the wholesale beef market due to weather issues. Meanwhile, traders took heart in the rise in wholesale prices yesterday but were disappointed by the slow movement.
  • Cash supplies appear to be large, which will make it difficult for feedlots to ask for higher prices. Showlist estimates are up everywhere except Kansas this week, with Nebraska's numbers expected to be around 30,000 head above week-ago.
  • Last week cash cattle trade took place around $132 in the Southern Plains.
  • Feeder cattle futures are shrugging off the lower grain futures and edging lower on the weaker live cattle trade.


Lean hog futures are slightly to moderately weaker.

  • Hog futures are seeing light selling pressure on weaker cash hog prices.
  • An update on the wholesale pork market is lacking due to weather issues. So traders remain focused on the light movement that occurred at the start of the week.
  • The cash hog index continues to trade at a slight premium to the December lean hog contract, which limits selling in the front-month contract.
  • There are also concerns about the winter storm that is moving into the East disrupting red meat demand.
  • Frigid Midwest temps and blowing snow is also making some producers unwilling to transport hogs.
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