Market Snapshot, Noon CT (VIP) -- June 13, 2013

June 13, 2013 07:05 AM
 

Corn futures have slightly extended losses and are trading 3 to 6 cents lower at midday.

  • Stepped up selling in the soybean pit has spilled over to corn, with additional pressure coming as traders still have yesterday's bearish S&D Report on their minds.
  • USDA's 2013-14 carryover projection, which came in above expectations but still down 55 million bu. from last month, eased the market's concerns about the poor start to the 2013 growing season.
  • But with more rain in the forecast in areas that are already saturated, growers are concerned about plant populations and general crop health.
  • Weekly export sales data is adding to the negative tone, as it showed corn sales of 81,500 MT for 2012-13 and 68,000 MT for 2013-14, which fell short of expectations.
  • After firming 3 cents this morning, Gulf basis is holding at that level and basis for August delivery is up 10 cents to reflect tight supplies.

 

Soybean futures have extended losses to trade mostly 20-plus cents lower, with July down around 30 cents.

  • Traders are focused on bull spreading unwinding, with the front-month contract pacing losses in the bean pit this morning.
  • Signs that demand for old-crop soybeans has slowed triggered extended pressure on nearby futures. This morning's weekly sales data showed soybean sales of just 33,500 MT for 2012-13.
  • Weekly export sales of 447,100 MT for 2013-14 were an improvement, but still came within expectations.
  • Traders also view weather as more friendly than detrimental to the crop. Producers, on the other hand, are concerned about the yield impacts to planting soybeans the last half of June.
  • The upper Midwest saw more rain overnight, and more is expected to move into the Corn Belt tomorrow.
  • After rising 2 cents for June delivery this morning, Gulf soybean basis is holding steady to stand 72 cents above July futures.

 

Wheat futures are mostly around 2 to 3 cents lower in Chicago and Kansas City, with Minneapolis steady to 3 cents higher.

  • Chicago and Kansas City wheat futures continue to be pressured by spillover from corn and soybeans, although pressure is being limited by strength in the Minneapolis market.
  • Ongoing planting delays, as well as the delayed establishment of the spring wheat crop are helping to lift Minneapolis wheat futures this morning.
  • But with harvest-related hedge pressure building, it's difficult for the Kansas City market to do more than stabilize.
  • Traders still have yesterday's USDA data on their minds, in which the agency raised the size of the winter wheat crop more than expected.
  • This morning's weekly export sales data showed wheat sales of 427,200 MT for 2013-14, which was within expectations. A total of 1,185,500 MT was carried over from 2012-13.

 

Live cattle futures remain slightly lower at midday. Feeder cattle futures are moderately lower.

  • Live cattle futures are under light pressure as traders wait on cash cattle trade to begin.
  • With this week's showlist up from last week, traders put more importance on boxed beef market for cash direction.
  • Choice beef values continue to retreat and are down $1.45 this morning while Select is up 61 cents. Movement is lighter this morning at 96 loads.
  • But overall, boxed beef movement has seen a pickup this week to suggest retailers are preparing for early July features.
  • Cash cattle trade isn't expected to get underway until late today or tomorrow as packers have not yet begun bidding for cattle.
  • August live cattle futures remain within the boundaries of the month-long consolidation range.
  • Feeder cattle futures are seeing profit-taking after yesterday's strong gains.

Lean hog futures remain mixed amid bull spreading.

  • June lean hog futures are enjoying followthrough technical-based buying to post a contract high at midday.
  • Improved technicals are building on themselves, with fundamental support coming from tightening market-ready supplies.
  • But nearbys are vulnerable to profit-taking at any moment's notice as June hogs are trading at around a $3 premium to the cash index and are technically overbought according to the Relative Strength Index.
  • The cash hog market is steady to higher, although packers have reduced kill hours due to negative cutting margins.
  • Weekly pork export sales rose 5,500 MT from the week prior to 12,100 MT. The tally included 2,800 MT in sales to Hong Kong.
  • This morning pork cutout values have softened by 99 cents.
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