Market Snapshot, Noon CT (VIP) -- June 24, 2013

June 24, 2013 07:17 AM
 

Corn futures remain 8 to 12 cents lower in late-morning trade on negative outside markets and perception that "rain makes grain."

  • The market turmoil caused by China's attempt to curb credit in it's "shadow market" has stocks lower globally and the U.S. dollar index stronger. This action is pressuring commodity futures lower.
  • Traders continue to take weather premium out of the market believing "rain makes grain" after weekend rains moved across the Corn Belt and more rains sweep across the Corn Belt today.
  • In addition, traders are looking at a change in the weather pattern, which traders believe will aid in plant growth. Sunday's National Weather Service 6-to 10-day forecast calls for below-normal precip across the western Corn Belt and above-normal precip across the eastern Corn Belt.
  • Traders are also reacting negatively to today's export inspections report, which showed 5.843 million bu. inspected which is down by around 8.3 million bu. from last week and below traders' expectations.
  • Traders look for this afternoon's crop conditions report from USDA to show 65% of the crop rated "good" to "excellent," up from 64% last week.
  • Traders' will soon turn their attention to Friday's Acreage and Grain Stocks Reports.
  • December corn futures gapped lower on the open, have attempted to fill the gap but are trading near opening levels. There is psychological support is at $5.40.

 

Soybean futures are slightly higher in the July contract and 2 to 5 cents lower in the deferred contracts.

  • Soybean futures are generally lower due to the widespread commodity sell-off prompted by the weakness in equities and strength in the U.S. dollar index.
  • The move by the People's Bank of China to rein in credit in the country's "shadow banking market" is rattling global markets and has potential negative implications for Chinese soybean purchases.
  • July futures are finding some support from today's export inspections report, which came in above expectations at 7.827 million bushels.
  • Traders are looking for this afternoon's crop conditions report to show 65% of the crop will be rated "good" and "excellent."
  • Gulf basis is unchanged in late-morning trade after improving 8 cents for immediate delivery in early morning trade, which tended to support July futures.

 

Chicago and Kansas City wheat futures are sharply lower with the Chicago down 14 to 17 cents and the Kansas City market down 11 to 16 cents. Minneapolis wheat is now narrowly mixed.

  • Harvest-related pressure is weighing on Chicago and Kansas City wheat futures, while continuing concerns for the spring wheat crop have limited losses in the Minneapolis market.
  • In addition, wheat futures are seeing selling pressure from the general commodity selloff prompted by the strength in the dollar index and sharp sell-off in global equity markets.
  • Harvest activity in Kansas picked up over the weekend, with traders noting reports of better yields and test weights than earlier.
  • Traders are reacting negatively to today's export inspections report, which came in below exceptions at 14.758 million bushels.
  • Gulf wheat basis is unchanged in late-morning trade.

 

Live cattle futures are slightly weaker in the August and later contracts. Feeder cattle futures are firmer.

  • Live cattle futures are favoring the downside as they weigh Friday's negative Cattle on Feed Report against the more positive view from Friday's Cold Storage Report.
  • Choice boxed beef this morning is 19 cents stronger at $199.10 and Select is 82 cents firmer as well. Movement was light at just 91 loads.
  • Light to moderate cash cattle trade was reported late Friday in the Plains at steady levels with the previous week. Traders look for an increase in showlists from last week.
  • Feeder cattle are firmer on the decline in grain prices.

 

Lean hog futures are moderately higher this morning as nearby contracts continue to lead gains.

  • The slightly better-than-expected Cold Storage Report continues to lift hog futures this morning. While USDA reports total frozen pork stocks at the end of May dropped 5.6% from the previous month and were smaller than traders feared total stocks came in 4.1% above year-ago levels, which still represents a plentiful supply situation.
  • Pork cutout values rose another 19 cents this morning. Movement is a moderate 109.5 loads.
  • Cash hog bids are steady at most locations, though packer demand is limited.
  • August live hog futures filled in last week's gap area and are challenging resistance at last week's high of $99.35.
     
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