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

July 5, 2013 06:59 AM

Corn futures continue to lose steam in the new-crop contracts. December and later contracts are down 8 to 10 cents and at new contract lows. July is up 7 cents in a continuation of bull spreading.

  • Bull-spreading continues as daily and weekly export sales support the old-crop and favorable weather pressures new-crop contracts.
  • The favorably viewed weather forecasts has added pressure to new-crop futures, pressuring December futures to new contract lows around $4.92.
  • Adding to the pressure of favorable growing conditions is the push by the U.S. dollar index to a three-year high today and a rise in interest rates on better-than-expected jobs data and an uptick in the number of people seeking work.
  • The daily sales of announcement for 120,000 MT of new-crop corn to unknown destinations is supporting old-crop futures.
  • Weekly export corn sales of 233,100 MT for 2012-13 and 81,400 MT for 2013-14, matched expectations but declined from week-ago.
  • Gulf basis is unchanged at midday.


Soybean futures are also seeing bull spreading with July up 8 cents, August down 6 cents and new-crop mostly 19 to 20 cents lower.

  • The sharp gains in the U.S. dollar index in the wake of the stronger-than-expected jobs numbers has traders moving to the negative side of all but the expiring July contract.
  • The benign weather forecast is pressuring new-crop futures as the forecast as viewed as positive for crop development.
  • Weekly soybean sales of 120,600 MT for 2012-13 and 249,100 MT for 2013-14 were within expectations, but down from the week prior.
  • Gulf soybean basis is unchanged in late-morning trade after firming for immediate and fall delivery this morning.


Wheat futures are mostly 2 to 7 cents lower in most contracts at Chicago, 7 to 8 cents lower in Kansas City and 6 to 7 cents lower in Minneapolis, with the exception of the July futures contracts, which are 1 to 2 cents higher.

  • Strength in the U.S. dollar index and spillover selling from corn and soybeans are pressuring all but the expiring contracts.
  • Kansas City wheat is also seeing some hedge-related selling pressure, but that impact is expected to decline as harvest nears completion.
  • Signs of strong export demand are lifting front-month contracts.
  • Weekly export sales of 593,100 MT for 2013-14 with China as the lead buyer represents solid demand.
  • Plus, USDA announced a 120,000-MT SRW wheat sale to China for 2013-14, which follows a 360,000-MT SRW wheat sale to the country Wednesday.
  • News South Korea has lifted its pan on U.S. wheat provided some support in early morning trade. However, Japan's ban on U.S. western white wheat remains in place.
  • Gulf basis is unchanged in late-morning trade.


Live cattle futures are slightly weaker while feeder cattle futures are moderately stronger.

  • Live cattle futures are seeing some pressure as the cash cattle trade took place on the Southern Plains at $1 lower prices from a week earlier Wednesday. More trade is expected in northern locations today as so far just light sales have taken place.
  • The dressed beef market is also adding light pressure as Choice beef is down $1.10 at $196.63 and Select is down 44 cents at $188.02. Movement is solid at 118 loads.
  • The surge in the U.S. dollar index to three-year highs due to today's jobs data is not seen as positive for beef exports. But the improving jobs picture may eventually mean good news for domestic beef demand.
  • August live cattle futures are at nearly a $3 premium to this week's cash trade.
  • Weekly beef export sales declined from last week's impressive tally, but sales of 12,400 MT still represent solid overseas demand.
  • Feeder cattle futures are getting a boost from the declines in corn futures.


Lean hog futures are mixed in bull spreading with the summer months up about 50 cents and the fall and later contracts down 20 to 40 cents.

  • Pork cutout firmed today after a sharp slide on Wednesday, which is providing some support for the summer contracts.
  • Pork cutout rose $1.95 and movement is a positive 213.5 loads. That increase keeps packer margins a few dollars above breakeven.
  • Weekly pork export sales fell from the previous week's strong tally, but sales of 10,000 MT still indicate solid export demand.
  • However, the surge in the U.S. dollar index is potentially negative for exports and is pressuring the fall and later contracts.
  • July lean hogs are at around a $1.50 discount to the cash hog index, while August futures are nearly $6 below the index. This is also supporting nearby contracts.
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