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

June 5, 2013 07:16 AM

Corn futures continue to trade mixed in bull-spreading with the July contract around 2 cents higher and deferred contracts7 to 8 cents lower.

  • Bull spreading prompted by tight old-crop supplies continues to support July futures and pressure new-crop futures today.
  • Adding to the buying interest in July futures is news the weekly ethanol production rose to its highest level since June 2012 today.
  • Even though showers continue across the western Corn Belt and more rain is forecast for this weekend, traders seem relatively unconcerned about losing intended planted corn acres to soybeans or Prevent Plant.
  • Pressure in new-crop futures is coming from forecasts for drier weather for wet areas next week.
  • Gulf basis at late morning is unchanged.


Soybean futures are bull-spread with July up 8 to 9 cents and new-crop futures down 8 to 10 cents.

  • Bull spreading continues to dominate trading today as traders focus on tight old-crop supplies versus prospects for an increase in supplies from new crop.
  • The lead July contract moved to its highest level since Sptember 2012 in early trade, reaching $15.49.
  • Traders say continuing corn planting delays may mean a switch in some intended corn acres to soybeans, which is a negative for new-crop beans. But that pressure is limited as continuing wet weather is delaying soybean planting as well.
  • Taiwan bought 124,000 MT of Brazilian soybeans this morning.
  • After a weaker start this morning, Gulf basis is now unchanged at midday.


Wheat futures are roughly 3 to 6 cents lower in Chicago and Minneapolis, while Kansas City wheat futures are 4 to 10 cents lower.

  • The main feature is spillover pressure from weakness in corn futures.
  • Informa Economics reportedly estimates 2013 U.S. winter wheat production at 1.494 billion bushels. That is down from their May forecast of 1.529 billion bu., but up 8 million bu. from USDA's May 1 estimate.
  • The firm reportedly forecasts hard red winter wheat production at 778 million bushels, nearly 10 million bu. above USDA’s May forecast. Soft red winter wheat production is forecast at 505 million bushels, 4 million above last month, and winter white production at 211 million, 6 million below USDA’s May forecast.
  • The GMO wheat issue continues to linger as a negative on the market. Tests have shown no GMO wheat in U.S. exports so far, but the Korean Feed Association today excluded the U.S. in its 60,000 MT purchase of optional origin wheat. And South Korea will continue to test shipments of U.S. wheat.
  • Lingering precip in the Central Plains is pressuring Kansas City wheat futures.
  • Gulf basis is listed as unchanged at midday.


Live cattle futures are moderately weaker at midday, while feeder cattle futures remain slightly lower.

  • Traders are reluctant to push prices higher as they continue to look for steady to lower cash cattle trade.
  • Adding pressure is news Choice boxed beef cuts decreased 89 cents this morning, though Select rose 54 cents. However, movement was strong at 143 loads.
  • Initial cash bids are at $121, which compares to asking prices of $126. The wide spread signals late-week trade is likely.
  • Futures remain well below last week's cash cattle trade at mostly $124, limiting pressure to profit-taking after yesterday's firmer close.
  • Feeder cattle futures are weaker on the lower live cattle futures.


Lean hog futures are mixed in late-morning trade.

  • Lean hogs continue to see some light profit-taking after strong gains the past few days.
  • But some buying interest has also returned to the market after an impressive jump of $3.80 in pork cutout value with movement at a strong 267.1 loads this morning.
  • Traders believe that increase will boost packer profit margins and make them more likely to bid higher for supplies.
  • The cash hog market is steady to firmer today.
  • Pressure also stems from the slight premium the front-month holds to the cash hog index.
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