Market Snapshot, Noon CT (VIP) -- May 23, 2013

May 23, 2013 07:02 AM

Corn futures opened weaker but moved to the plus side with old-crop leading gains. July futures are up 10 cents while new-crop contracts are 2 to 4 cents higher.

  • Short-covering is coming on spillover strength from soybeans and wheat.
  • The surge took out yesterday's high, triggering buy stops which pressed prices higher.
  • Traders note there is resistance at $6.70 in the July and $5.45 in December futures.
  • A weaker dollar is also cited as friendly for commodity markets.
  • New-crop contracts are getting support of cool, wet conditions in the Corn Belt this weekend, which will delay planting. Talk that this might switch some corn acres to beans or other crops has surfaced providing light support to new crop.
  • This morning's weekly export sales tally from USDA was at the upper end of expectations with sales of 104,600 MT for 2012-13 and 341,600 MT for 2013-14.
  • Gulf basis is unchanged from early-morning with the exception of last-half of June which is 5 cents higher.


Old-crop soybean futures have extended gains, with July up 30-plus cents. New-crop futures have firmed.

  • Bull spreading continues to dominate trade as old-crop futures receive bullish demand news but new-crop futures receive new worries of increased planted acres.
  • In addition, news the Argentine dockworker strike will now likely extend into next week is providing fresh bullish news for July futures as the strike is seen as driving buyers to the already scare old-crop U.S. supplies.
  • Net weekly export sales topped the 1 MMT mark today, exceeding expectations by a wide margin and nearly tripled the week prior's tally.
  • USDA also announced a daily sale of 115,000 MT of soybeans to China for 2013-14.
  • The weaker dollar is also cited as a positive to soybeans in general and old-crop in particular.
  • The wet, cool weekend forecast for the Corn Belt has renewed concerns of corn acres slipping over to soybeans and is tempering buying interest in new-crop futures.
  • Gulf basis is unchanged from early morning which saw basis slide 15 cents for immediate delivery.


Wheat futures at Chicago continue to post double-digit gains with Kansas City and Minneapolis wheat are roughly 5 to 9 cents higher.

  • Spillover strength from both corn and soybeans is lifting wheat futures.
  • Dollar weakness is also a positive factor as rumors China may be buying U.S. wheat continue to swirl.
  • Also, this morning's weekly export sales topped expectations by a wide margin. Traders are impressed by the strong export sales in the face of recent dollar strength.
  • The National Drought Monitor reflects little change in drought in Kansas, but it shows an increase in the intensify of drought in wheat areas of Oklahoma and Texas. This keeps HRW crop concerns in traders' minds.
  • Gulf basis is unchanged for HRW, 5 cents weaker for immediate delivery of SRW and 4 to 8 cents higher for June through September delivery.


Live cattle futures continue to post slight gains this morning. Feeder cattle futures are more than a $1 lower.

  • Live cattle futures are enjoying some corrective short-covering this morning while dressed beef has again posted a record in the face of weaker cash cattle prices reported yesterday.
  • Choice boxed beef values posted another record at $211.35, up 15 cents. Select weakened 54 cents, however. Movement is a light 97 loads.
  • Packers' profit margins are very positive, which is providing some support.
  • Traders still cite recent slow movement as signs demand will weaken.
  • Futures are finding some support the weekly beef exports report which shows a rise for the week ended May 16 to 24,400 MT, up 15,700 MT from the week prior.
  • Yesterday's Cold Storage Report, which showed a slight drawdown in stocks from last month is providing light support.
  • The rally in corn futures has feeder cattle futures on the defensive.


Lean hog futures opened slightly lower, turned narrowly mixed but slumped again.

  • Profit-taking is the order of the day following yesterday's strong gains.
  • Yesterday's negative Cold Storage Report is adding to selling pressure, as the report showed stocks up more than expected from last month and year-ago.
  • The pork cutout value weakened 7 cents and movement is a moderate 144.7 loads.
  • Packers are preparing for a very light weekend kill and a holiday-shortened week.
  • Dollar weakness is cited as a positive.
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