Market Snapshot, Noon CT (VIP) -- July 1, 2013

July 1, 2013 07:11 AM
 

July corn futures have turned 4 cents lower at midday. New-crop contracts are trading generally 5 to 7 cents lower.

  • Traders are still reacting negatively to Friday's planted acreage data, which is pressuring new-crop futures.
  • Traders are looking for this afternoon's crop condition update from USDA to show 67% of the nation's corn crop rated as "good to excellent," which would be two percentage points better than last week.
  • Traders are taking a favorable view toward the near-term weather forecast which calls for dry conditions in the western Corn Belt which will boost crop development and beneficial rains in the eastern Belt.
  • Gulf basis is unchanged in late-morning trading.

 

Soybean futures are seeing continuing bull spreading with the July contract up 9 cents and new-crop contracts down mostly 5 to 9 cents.

  • Bull spreading continues to driven by USDA's grain stocks and acreage data which shows old-crop supplies are tighter than expected and planted acreage rose from March intentions.
  • Today's crop condition updated from USDA is expected to show 66% of the nation's soybean crop rated "good to excellent," which would be up one percentage point from the previous week.
  • Traders are ignoring today's export inspections report, which came in mid-range of expectations and down 3 million bu. from the previous week.
  • New-crop futures are seeing light pressure from the generally favorable weather forecast for the Midwest this week.
  • Gulf basis is largely unchanged in late-morning trading with the exception of first-half July delivery, which is 5 cents lower.

 

Wheat futures are mostly 1 to 2 cents lower in Chicago, 1 to 3 cents higher in the July through March contracts in Kansas City and 2 to 5 cents lower in Minneapolis.

  • The SRW harvest in the eastern Corn Belt is being slowed by wet weather, which is raising quality concerns and limiting selling interest. Still, Chicago wheat futures are being dragged lower by spillover from the corn market.
  • Kansas City futures are working higher amid short-covering, though better-than-expected harvest results in some areas of the Southern Plains is limiting buying interest.
  • Futures got a lift from today's strong export inspections report, which came in at 26.42 million bu., well above expectations and 11.67 million bu. above the previous week.
  • Gulf basis is unchanged in late-morning trading.

 

Live cattle futures are moderately higher this morning and feeder cattle futures are enjoying moderate to strong gains.

  • Short-covering is being seen in live cattle following Friday's gap-filling losses.
  • Morning boxed beef trade was disappointing as was it showed Choice boxed beef down 56 cents to $196.94 and Select down 82 cents at $186.33. Movement was a slow 70 total loads.
  • August futures continue to hold a $2 premium to last week's cash prices in the Southern Plains. Traders are waiting for strong packer margins to equate to firmer cash trade.
  • Feeder cattle futures are getting a lift from the rise in live cattle futures and the decline in new-crop corn futures.
  • A stronger stock market and weakness in the U.S. dollar index are encouraging the bulls.

 

Lean hog futures are narrowly mixed at midday.

  • The market has quickly digested Friday's Hogs & Pigs Report, which was generally in line with expectations. They have largely moved on to watching consumer demand.
  • The cash hog market is mostly steady this morning as packer margins are favorable although the holiday-shortened week will limit demand.
  • The pork cutout dipped 73 cents this morning and movement is a light 112.3 loads, which is somewhat concerning to bulls.
  • July hogs continue to hold a $2-plus discount to the cash hog index. However, the index has been on the decline relieving the need to narrow the discount in the near term.
     
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