Market Snapshot, Noon CT (VIP) -- June 11, 2013

June 11, 2013 06:56 AM

Corn futures are 3 to 8 cents higher, with old-crop leading gains amid bull spreading.

  • A combination of pre-report position squaring ahead of tomorrow's USDA reports, concerns about corn acreage and weakness in the dollar index are supporting corn futures this morning.
  • Yesterday's progress data from USDA revealed around 4.87 million intended corn acres had not yet been planted as of Sunday, which raises concern about how many acres will be switched to another crop or left unplanted.
  • USDA's condition data also showed further deterioration in the crop. Our weighted Crop Condition Index dropped eight points last week, led by deterioration in the Iowa crop.
  • Traders are also focused on evening positions ahead of tomorrow's USDA reports, which is encouraging short-covering as traders look for USDA to trim old- and new-crop carryover levels from last month.
  • Gulf basis is steady at midday for immediate delivery but has softened by a dime for August delivery to suggest demand is lackluster.


Old-crop soybean futures are leading the charge higher by posting double-digit gains. New-crop futures are mostly 5 to 6 cents higher.

  • July soybean futures are posting sharp gains, although little trade has been seen above the $15.40 level so far today.
  • Traders are focused on evening positions ahead of tomorrow's USDA reports, with weakness in the dollar index also providing support.
  • Buying in new-crop futures is being limited due to projections by Oil World, which says it expects an 18% increase in global soybean production in 2013-14. But it expects China's upcoming soybean crop to be smaller.
  • Despite the slower-than-usual planting and emergence of this year's crop, traders aren't overly concerned about new-crop U.S. crop prospects, as they say there is still a lot of growing season ahead to build a favorable yield.
  • Traders are also focused on readying for USDA's reports tomorrow. According to pre-report expectations, traders look for USDA to leave its 2012-13 carryover unchanged at 125 million bu., but for 2013-14 carryover to increase by around 8 million bu. to 273 million bushels.


Wheat futures are mostly 3 to 7 cents higher at all three exchanges on spillover from neighboring pits.

  • Wheat futures are benefiting from spillover from neighboring pits and weakness in the U.S. dollar index given the lack of positive fresh demand news.
  • Traders are taking the opportunity to cover short positions to suggest recent losses were overdone.
  • Additional support is coming from concerns about the spring wheat crop given ongoing planting delays. Our weighted crop condition index also showed the spring wheat crop declined slightly last week.
  • With harvest in the early stages in the Southern Plains, traders aren't overly concerned about forecasts for excessive heat in the region this week.
  • Meanwhile, traders look for USDA to make only small adjustments to old-crop carryover tomorrow morning, but for 2013-14 carryover to decline by around 36 million bu. from last month partly due to expectations USDA will lower its 2013 wheat crop projection.
  • Futures are finding light support on news Russia has trimmed its 2013 wheat production forecast to 50 MMT to 54 MMT (from 54 MMT to 55 MMT previously).
  • Japan continues to restrict U.S. western white wheat imports as it awaits the conclusion of the U.S. GMO wheat investigation.

Live cattle futures are moderately to sharply higher on corrective buying.

  • Live cattle futures are benefited from ideas recent losses are overdone, with technical-based buying giving futures a lift this morning.
  • Traders are also noting the stiff discount nearbys hold to last week's cash cattle market and the possibility that cash trade should at least stabilize this week if the boxed beef market continues to strengthen.
  • But traders are also keeping an eye on packer demand given the fact many feedlots carried supplies over last week.
  • The boxed beef market is mixed this morning after the solid start to the week. Choice values have retreated 12 cents, but Select is up 86 cents. A strong 138 loads of cuts, trim and grind have changed hands.
  • Spillover from live cattle futures is generating spillover buying in feeder cattle futures,


Lean hog futures are slightly to sharply higher, with nearbys leading gains amid tightening market-ready supplies.

  • Nearby lean hog futures are benefiting from followthrough after yesterday's gains due to rumors China is buying U.S. pork and tightening market-ready supplies.
  • Improving technicals are also building on themselves as June lean hogs have returned above the $100 mark and July hogs are challenging this psychological barrier.
  • July lean hog futures gapped higher on the open and have extended gains, but the contract has moved into oversold territory and is at risk of a price correction.
  • Despite negative profit margins, packer demand for cash hogs remains strong, with bids steady to higher. Some packers have trimmed kill hours in an effort to lift margins.
  • Traders are also keeping a close eye on the pork cutout market. This morning, pork cutout values rose $1.63 and movement picked up to 218.7 loads.
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