Market Snapshot, Noon CT (VIP) -- December 20, 2013

December 20, 2013 06:03 AM

Corn futures continue to trade marginally higher in most contracts on spillover strength from soybeans.

  • Corn futures continue to mark small gains on spillover strength from soybean futures and position evening ahead of the weekend and thin holiday trading expected next week.
  • Slight weakness in the U.S. dollar index is also supporting this morning's slim gains.
  • Hanging over the market are concerns China will reject further shipments of U.S. corn because of an GMO corn variety that has yet to be approved by the Chinese government. U.S. officials meeting with Chinese officials are urging quick approval of the variety but immediate action is not expected.
  • Traders note China was listed as a buyer of U.S. corn this week and USDA this morning indicated private exporters sold 180,000 MT of corn for delivery to Japan during the 2014-15 marketing year. Current corn prices are stimulating export demand.
  • Technical traders note March futures continue to trade above resistance at $4.30 and are marking the fifth day of successively higher highs and higher lows.
  • Gulf corn basis is unchanged for all delivery periods in late-morning trading.


Soybean futures are 9 to 13 cents higher in January through September contracts and 6 to 7 cents strong in the far-deferred contracts.

  • Soybean futures have firmed on concerns over hot and dry weather that's starting to plague the Argentine soybean crop.
  • Weather forecasts call for hot and dry weather in Argentine to continue into the middle of next week but a storm front is expected to bring up to a half inch of rain over 60% of the crop area on Christmas Day.
  • Weakness in the U.S. dollar index is also supportive this morning.
  • However, traders continue to voice concerns Chinese buying interest will soon shift to South America as a record crop is expected from the region. Those worries temper gains.
  • Technical traders continue to view positively today's bounce from the developing support zone at $13.20. Resistance sits just above the market at $13.53 1/2. A surge above that resistance would break the recent sideways trading range and possibly trigger follow-through buying.
  • Gulf soybean basis is 1 cent weaker for January delivery and steady for all other delivery periods in late-morning trading.


Wheat futures are generally 1 to 3 cents higher on spillover strength from soybeans.

  • Spillover strength from soybeans and short-covering continue to dominate trading in the wheat market.
  • The small setback in the U.S. dollar index is also helping to firm prices.
  • Traders continue to worry about export prospects for U.S. wheat with global wheat stocks are plentiful levels. But they do take heart yesterday's pickup in weekly export sales as reported by USDA.
  • Bitterly cold temperatures are again due for the HRW wheat country and long-range weather forecasts suggest that crop may be under moisture stress when it emerges from dormancy this spring.
  • Gulf SRW wheat basis is steady in late-morning action following firmer bids in early trading. The firmer basis bids has traders looking for more export news to be surfacing soon.


Live cattle futures are slightly to moderately higher with the February contract leading gains. Feeder cattle futures are slightly higher in pre-report trading.

  • Cattle futures have added to small gains in late-morning trading as traders continue to even positions ahead of USDA's Cattle on Feed (COF) Report this afternoon.
  • Traders expect the report to show On-Feed at 95.4%, Placements at 100.9% and Marketings at 94.6% of year-ago levels.
  • The cash cattle trade is weaker versus a week earlier with trade at $130 in the Southern Plains, down $1 from a week earlier.
  • Choice boxed beef prices fell $1.65 and Select dropped $1.61 this morning. Movement is a poor 68 loads.
  • Traders are encouraged about progress made with restarting beef trade with China, although final agreement isn't expected until next summer.
  • Feeder cattle futures continue to gain from live cattle futures and position evening ahead of this afternoon's COF report.


Lean hog futures are choppy but favoring the downside.

  • Lean hog futures have turned mixed on position squaring but favor the downside on continuing weakness in the wholesale pork trade and cash hog market..
  • The front-month February contract gained some light support from the 95-cent gain in the pork cutout value this morning. But movement is a light 172.6 loads.
  • Cash hogs are $1 to $2 lower as the market adjusts to holiday-shortened schedules the next two weeks.
  • The $5-plus premium held by February futures versus the cash hog index is seen limiting buying interest.
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