Market Snapshot, Noon CT (VIP) -- December 5, 2013

December 5, 2013 06:11 AM

Corn futures are mixed with a slight downside bias.

  • Corn futures have trimmed early losses and are trading near their highs for the day as mild short-covering has crept into the market. This is countering mostly negative news today.
  • Futures opened lower on disappointing weekly export sales. USDA reports weekly corn sales totaled only 593,600 MT for 2013-14, which were well under expectations.
  • Traders also continue to voice concerns China may reject additional cargoes of U.S. corn if they are found to contain an unapproved GMO trait that has caused China to shun several cargoes recently.
  • Adding pressure earlier was news China's state-run China National Grain and Oils Information Center (CNGOIC) now pegs its corn production at 217.51 MMT this year -- an increase of 4.6% over year-ago. The figure is well above USDA's November projection of 211 MMT. CNGOIC forecasts 2013-14 Chinese corn consumption at 199.79 MMT, up 5.2% from 2012-13.
  • Traders are absorbing news that Brazilian analytical firm Agroconsult now pegs that nation's corn crop at 76.1 MMT, up from its previous projection of 75.7 MMT.
  • Traders shrugged off the weaker U.S. dollar index in early trading, but that is now helping limit selling pressure.
  • Gulf corn basis is now steady in late-morning trading after staring the day with declines of 3 to 4 cents for December through February delivery.


Soybean futures have turned narrowly mixed ahead of afternoon trade.

  • Soybean futures have trimmed earlier losses with some contracts now trying to poke above unchanged.
  • March futures continue to work on an inside day with yesterday's low providing support and yesterday's high marking resistance. A move through either of these points would likely trigger stops.
  • USDA reported weekly export soybean sales totaling 805,200 MT for 2013-14 and 355,600 MT for 2014-15, which was at the top end of pre-report expectations.
  • USDA also announced a daily 110,000-MT soybean sale to China for 2014-15.
  • Prospects of a large South American crop continue to hang over the market. Private Brazilian firm Agroconsult projects that country will produce a record 90.7 MMT of soybeans. The firm had previously pegged the crop at 86 MMT.
  • Gulf soybean basis is steady in late-morning trading.


Wheat futures are continue to trade generally 4 to 8 cents lower for all three flavors.

  • Futures remain on the defensive as traders continue to react negatively to a disappointing weekly export sales figure from USDA.
  • USDA stated weekly wheat export sales reached just 229,200 MT. That figure was well below expectations and at a marketing-year low.
  • The low figure adds to trader concerns the recent dollar strength has priced U.S. wheat out of the global market. Traders are shrugging off the weaker dollar today.
  • Also pressuring wheat futures is news the Food and Agriculture Organization of the UN raised its 2013-14 world wheat crop forecast by 2.3 MMT to 710.8 MMT.
  • March SRW futures tripped sell stops at Monday's and Wednesday's lows, driving futures sharply lower before short-covering stepped in. Futures are currently trading mid-range.
  • Gulf SRW basis is steady.


Live cattle futures continue to trade moderately weaker in the front four contracts while feeder cattle futures are slightly higher.

  • Live cattle futures are on the defensive as traders wait for direction from the cash cattle market. However, expectations prices will prove to be steady to firmer compared with last week's $132 trade in the Southern Plains is limiting selling interest.
  • Cash sources indicate packers are bidding $129 per cwt. while feedlots are asking $134 to $135.
  • The wholesale beef market which previously provided support is losing some of its shine. Choice boxed beef fell 58 cents but Select rose $1.15. Movement this morning is a disappointing 71 loads.
  • USDA reports total beef exports rose to 234.735 million lbs. in October compared to 212.322 million lbs. in September and 222.632 million lbs. a year earlier.
  • Feeder cattle futures are barely above unchanged on weakness in corn futures. Pressure on live cattle is limiting buying interest.


Lean hog futures are slightly to moderately weaker.

  • Lean hog futures are weaker as traders align the soon-to-expire December contract against the cash hog index.
  • Fund liquidation is contributing to declines, as well.
  • Cash hog bids are steady at most Midwest locations. Wintry weather has moved into the Midwest and could slow hog movement the remainder of the week.
  • The pork cutout slipped another 34 cents this morning following yesterday's decline but the lower prices are attracting demand as movement is reported at 258.9 loads.
  • USDA states pork exports reached 435.2 million lbs. in October, up from 394.925 million lbs. in September but down from 492.757 million lbs. a year earlier.
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