Market Snapshot, Noon CT (VIP) -- December 23, 2013

December 23, 2013 05:47 AM
 

Corn futures are mixed with a slight upside bias in the most actively traded contracts.

  • Light holiday trading is dominating today's action as both soybeans and wheat provide spillover pressure but strong export inspections and a weaker dollar provide support.
  • Futures are gaining support from another positive weekly export inspections report. The report showed 35.888 million bu. passing inspections for the week ended Dec. 19. That is above expectations and 10.75 million bu. above the previous week.
  • China imported 787,043 MT of U.S. corn last month, according to official customs data, which was up 108% from year-ago. But those imports were short of expectations, due in part to rejections of some U.S. cargoes.
  • South Korea tendered for 70,000 MT of feed corn this morning.
  • Gulf corn basis has moved to steady in late-morning trading after falling 3 cents for immediate delivery in early trading.

 

Soybean futures are 6 to 8 cents lower through the September contract, with far-deferred contracts unchanged to 3 cents lower.

  • Profit-taking is being seen in the soybean market after futures initially traded higher.
  • Early support came on dry weather concerns for Argentina but selling moved into the market as private weather forecasters added rain to their forecasts for their 6- to 10-day outlook.
  • Meanwhile, prospects for record large harvest out of South America serves as an overriding negative on futures.
  • The market is brushing off news of a 120,000-MT daily sale of soybeans to unknown destinations for 2013-14. Strong soy demand is known.
  • Traders are also ignoring today's weekly export inspections report that showed 55.25 million bu. passing inspections through the week ended Dec. 19. That is at the top end of expectations but down 7.346 million bu. from the previous week. China accounted for 43 million bu. of the soybean inspections.
  • Gulf soybean basis is steady in late-morning trading after rising 2 cents for immediate delivery this morning.

 

SRW wheat is 2 to 4 cents lower, HRW wheat is mostly 3 to 6 cents lower and HRS wheat is 2 to 5 cents lower.

  • Oppressive bearish attitudes continue to dominate wheat markets with today's disappointing export news adding to selling pressure.
  • Traders are disappointed in today's weekly export inspections report, which fell just short of expectations at 19.464 million bu., but that was 1.835 million bu. higher than the previous week.
  • News from Ukraine and Russia reconfirms the view that there is plenty of wheat available on the global market. Russia's ag ministry says harvest of the country's wheat crop is complete and wheat production totaled 54.4 MMT, which is up sharply from 39.7 MMT last year. Plus, 91% of Ukraine's winter grain crop is rated in good to satisfactory condition, according to UkrAgroConsult.
  • Traders are ignoring bitterly cold temps across winter wheat areas of the United States. Wheat is exposed to these conditions in some areas, including eastern Colorado, northern Kansas and southern Nebraska.
  • The market is also showing little response to Chinese wheat imports for November that totaled 968,074 MT, which was up 721.1% from year-ago.
  • Gulf SRW basis is quoted as steady in late-morning trading.

 

Live cattle futures are slightly higher in followthrough from Friday's Cattle on Feed Report. Feeder cattle futures are choppy.

  • Live cattle futures continue to trade to the plus side in reaction to Friday's Cattle on Feed Report, which showed Placements well below the average pre-report guess. The feedlot number was the second lowest Dec. 1 feedlot number since USDA began recording data in 1996.
  • However, much of the report's positive news was already built into futures ahead of the report.
  • The frigid temps in the Northern Plains and Midwest are also providing some support due to their stress on livestock and feedlot unwillingness to cattle to market in the cold.
  • Wholesale boxed beef is telling a mixed story this morning with Choice beef down 14 cents but Select beef up $1.18. Movement is a poor 54 loads.
  • Cash cattle trade will be hard to gauge with Christmas at midweek. Last week, trade took place at mostly $1 lower prices of $130 in the Southern Plains.
  • The slight gains in the corn market are providing some selling pressure in the feeder cattle market, but these are offset by the tight supplies reflected in USDA's Cattle on Feed Report.

 

Lean hog futures are slightly favoring the upside.

  • Lean hog futures are slightly higher in very narrow trading.
  • Cash hog bids are lower and demand is limited due to the holiday disruption in slaughter schedules.
  • The February contract continues to trade at a $6 premium to the lean hog index, which tends to limit buying interest as the cash index is trending lower.
  • Some traders are wondering where the impact of PEDV is, as hog runs remain large. But executives at Smithfield Foods say the disease will reduce U.S. pig production by 2% to 3% in 2014.
  • The pork cutout value edged down 18 cents this morning but movement is a steady 236.14 loads.
  • Traders are waiting for an update on meat inventory supplies from this afternoon's Cold Storage Report. Pre-report expectations are for pork stocks as the end of November to come in around 549.2 million pounds.
     
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