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

December 13, 2013 06:05 AM

Corn futures have softened to trade 5 to 6 cents lower this morning.

  • Chinese rejections of U.S. corn shipments continues to pressure the corn market. China-based consulting firm Shanghai JC Intelligence Co. says 4,000 MT to 5,000 MT of DDGs from the U.S. are being held for testing of the presence of MIR 162 (Syngenta's Agrisure Viptera).
  • While China continues to make a stink about GMO-content in U.S. corn, recent weekly export sales tallies along with daily sales to "unknown" signal still-strong demand for the U.S. grain.
  • Beneficial rains in South America keep large crop prospects there in focus.
  • A proposal from lawmakers' to eliminate the ethanol mandate from the Renewable Fuels Standard (RFS), while unlikely to gain traction, continues to make traders wary of the long side of the market.
  • The market is ignoring current strong ethanol demand. Weekly production hit its highest level since January 2012 last week.
  • Gulf basis ticked up 2 cents for immediate delivery at midday, possibly signaling more export demand news is ahead.
  • Extreme cold in the northern Midwest has slowed barge movement and held basis levels at interior locations mostly steady.


Soybean futures have pared losses slightly to trade fractionally to 4 cents lower.

  • Soybean futures have seen some technical damage in recent sessions; therefore, traders are taking some profits and exiting long positions ahead of the weekend. Dollar strength adds incentive for traders to do so. So far the market has respected key levels of support.
  • Favorable weather and recent rains in Argentina add to ideas South America will produce a record-large crop.
  • Rumors of potential cancellations of soybean purchases by China continue to circulate.
  • The market is ignoring news China's Ministry of Commerce has nearly doubled its December soybean import forecast from its prior forecast to 6.34 MMT, as strong demand is known.


SRW and HRW wheat continue to see losses around 6 cents in most contracts, while HRS wheat is around 3 cents lower.

  • Expectations for both domestic and world supplies to be plentiful continue to weigh on the wheat market.
  • In addition, the market is seeing some followthrough selling after the market's downside breakout this week.
  • Dollar strength and spillover from the corn and soybean markets adds to the negative tone.
  • CBH Group raised its Western Australia grain crop from last month, saying yields were better than expected. Wheat accounts for about two-thirds of the crop. Earlier this week, USDA raised its forecast for the Australian wheat crop.
  • Gulf SRW wheat basis held steady at midday after surging 7 to 12 cents this morning.
  • Ukraine's ag minister says he expects the country's grain exports to total 3.5 MMT in December, which is down from a record high of 4.7 MMT in November. For the first two months of 2014 the ag minister expects total grain exports to slow to 3 MMT.


Live cattle futures are slightly to moderately weaker, as are most feeder cattle futures contracts.

  • Traders in the live cattle market are focused on reducing risk ahead of the weekend and the start of cash cattle trade.
  • Weakness in the boxed beef market yesterday eroded hopes for steady cash cattle trade this week as showlist estimates are up at most locations.
  • December and February futures are trading near line with last week's cash prices of $132.
  • This morning, Choice boxed beef plunged another $2.50 to $197.95 per cwt., while Select rose 51 cents. Just 80 loads changed hands, despite the major price break.
  • Feeder cattle futures are favoring the downside as traders are booking profits after yesterday's strong gains.


Lean hog futures are moderately lower in most contracts.

  • Weakness in the product market and plentiful hog supplies are pressuring hog futures to wrap up the week.
  • The pork cutout value fell $1.33 this morning, though movement was solid at 210.37 loads.
  • Packers continue to enjoy wide profit margins, but readily available supplies means they have little incentive to raise bids. Cash hog bids are steady to lower today.
  • The cash hog index continues to slide and it is now just mildly below the December contract, which expires at noon CT today. However, the soon-to-be front-month is well above the index, which is causing the contract to lead losses.
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