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

November 12, 2013 06:02 AM
 

Corn futures remain mostly a penny lower ahead of midday.

  • After a choppy start, corn futures have favored a weaker tone, with nearbys a penny lower ahead of noon, CT.
  • After unwinding spreads with soybean futures yesterday, spreaders are back buying soybeans today.
  • Adding to the weaker tone is a disappointing weekly export inspections tally of 16.701 million bu., which came in below traders' expectations.
  • Traders expect this afternoon's progress data from USDA to show corn harvest was around 84% complete as of Sunday.
  • Gulf corn basis has improved to steady to 2 cents higher at midday, which suggests exporters are in need of supplies.

 

Soybean futures continue to extend gains, with nearbys 12 to 16 cents higher.

  • After unwinding long soybean/short corn spreads yesterday, traders are back buying soybean futures.
  • Indications of strong demand are lifting futures, as China's Ministry of Commerce has more than doubled its November soybean import forecast to 5.95 MMT. However, it also lowered its October forecast by 680,000 MT to 4.53 MMT.
  • Also this morning, USDA announced China purchased 116,000 MT of soybeans and an unknown buyer purchased 35,000 MT of soyoil -- all for 2013-14 delivery.
  • Weekly export inspections of 79.697 million bu. came within lofty expectations.
  • January soybean futures saw buying pick up as futures returned above the $13.00 level this morning. The contract has moved above resistance at the October high of $13.12 3/4.
  • Traders expect USDA to report soybean harvest 94% complete as of Nov. 10 in this afternoon's update.

 

All wheat flavors are posting losses ranging from fractional to 3 cents.

  • After a brief period above unchanged early this morning, all wheat flavors have softened.
  • Wheat is seeing spillover from weakness in the corn market.
  • This morning's weekly export inspections report also failed to provide support. It showed inspections of 12.228 million bu., which came within expectations.
  • Given recent dollar strength, traders are concerned the U.S. has lost its competitive edge.
  • A recent surge in corn demand adds to such ideas.
  • USDA's crop condition data this afternoon is expected to confirm the U.S. winter wheat crop is off to a favorable start.

 

Live cattle futures remain narrowly mixed as traders wait on cash trade.

  • Price action is lackluster in the cattle pits as traders await news on the cash market.
  • Pressure is being limited by news this week's showlist isn't as large as feared. While still up from last week overall, Texas feedlots have fewer market-ready animals this week.
  • Choice beef values are 22 cents weaker this morning and Select is down $1.09. Movement has surged to 198 loads, which suggests there is still demand above the key $200 level in Choice values.
  • Cattle slaughter is projected at 121,000 head today, which is steady with week ago, but down 8,000 head from year-ago.
  • February live cattle gapped slightly higher on the open and filled the gap and are trading mid-range at midday.

 

Lean hog futures have weakened to trade slightly to moderately lower on profit-taking.

  • After a mixed start, lean hog futures have weakened amid profit-taking and indications supplies are building.
  • Pork cutout values have slipped 40 cents this morning, but movement has surged to 494.84 loads, which suggests prices are attracting demand.
  • Hog slaughter today is projected at 436,000 head, up 3,000 head from last week and around 1,500 head above year-ago.
  • After starting the week steady to firmer, the cash market has a negative bias today to suggest packers are having no difficulty securing supplies.
  • The $2 premium nearby contracts hold to the cash hog index is weighing on nearby futures.
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