Market Snapshot, Noon CT (VIP) -- December 9, 2013

December 9, 2013 06:03 AM
 

Corn futures are 1 to 3 cents higher through the 2014 contracts.

  • A better-than-expected weekly export inspections report and spillover strength from soybeans has corn futures trading higher
  • USDA reports 40.246 million bu. passed inspections from the week ended Dec. 5, which is 4.2 million bu. higher than the previous week and well above expectations.
  • Meanwhile, traders are looking ahead to USDA's Supply & Demand Report due tomorrow. Pre-report expectations are for USDA to trim its ending stocks projection for 2013-14 by around 26 million bu. to 1.861 billion bushels.
  • Large speculators trimmed their net short position the week ended Dec. 3, signaling attention is shifting to year-end positioning.
  • Gulf basis is steady in late-morning trading after rising a penny for February delivery in early morning trading. The steady to firmer basis reflects solid export demand and limited farmer sales.

 

Soybean futures are 4 to 19 cents higher through the 2014 contracts with the January contract leading gains.

  • Soybean futures surged on the open of daytime trade on strong export news.
  • USDA reported weekly export inspections totaled 60.43 million bu. for the week ended Dec. 5. That figure is 5.5 million bu. higher versus the previous week and above expectations.
  • The market benefited in early trading on news of strong Chinese imports. According to official customs data, China imported 6.03 MMT of soybeans in November, up 43.9% from October. Year-to-date imports of 55.97 MMT are up 6.6% from year-ago.
  • Also, USDA this morning announced China purchased 290,000 MT of soybeans, 230,000 MT of which are for 2013-14 and 60,000 MT for 2014-15.
  • Traders are also readying for S&D Report, which is expected to show 2013-14 carryover at 154 million bu., which would be a 16-million-bu. decrease from November but a 13-million bu. increase from 2012-13.
  • Gulf soybean basis is steady in late-morning trading after rising 5 cents for immediate delivery in early morning action. That early strength may mean more export demand news lies ahead.

 

Wheat futures are narrowly mixed ahead of this afternoon's trade.

  • Wheat futures are benefiting from spillover strength from corn and soybean futures and positive export news.
  • But traders still worry U.S. wheat prices are not competitively priced on the global market.
  • The market is gaining some support on concerns about winterkill in the central Plains.
  • Today's weekly export inspections report showed a total of 19.76 million bu. of wheat passing inspections, which is up 4.245 million bu. from the previous week and above expectations.
  • Traders are looking ahead to tomorrow's Supply & Demand Report. Surveys indicate the trade expects it to show a 12-million-bu. reduction in 2013-14 wheat carryover to 553 million bushels.
  • Gulf SRW wheat basis is unchanged in late-morning trading following a steady to 1 cent higher basis in early trading.

 

Live and feeder cattle futures continue to post slight gains to start the week.

  • Light short-covering is the main feature this morning as traders wait to get a handle on showlist totals and how much this week's storms disrupt trade in the Southern Plains.
  • Futures are finding some light buying support due to the slight discount December futures carry versus last week's $132 cash cattle trade.
  • Packer profit margins remain in the red, which will continue to make them reluctant buyers.
  • But the boxed beef market did firm this morning with Choice beef listed $1.31 higher and Select $1.37 higher. But movement is a lackluster 74 loads.
  • Feeder cattle futures are supported by the firmer live cattle futures trade but the rise in corn futures is limiting buying interest.

 

Lean hog futures are higher with the February contract leading gains and the more deferred contracts seeing only slight gains. June futures are 20 cents lower.

  • The deep cold temperatures and continuing storm pattern in southern areas has prices on the plus side this morning.
  • Part of the gains are short-covering following last week's downturn in prices.
  • Cash hog bids are mixed with prices up 50 cents to down $1. Packers continue to enjoy wide profit margins.
  • While the winter storms are cited as a continuing concern, transportation does not appear to be impacted significantly.
  • Some selling pressure is coming from today's decline in pork cutout value. USDA reports it fell $1.05 this morning and movement is a moderate 208.95 loads.
     
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