Corn futures are about 4 to 5 cents lower through the 2014 contracts.
- The combination of open harvest conditions and potentially negative news concerning ethanol has corn futures on the defensive.
- Futures are seeing followthrough selling on news of EPA's proposal to lower the corn ethanol component of the Renewable Fuels Standard for 2014. Indications are that the document has three options on the level for corn-based ethanol: 12.36 billion gallons, 13.00 billion gallons and 13.15 billion gallons, with the 13-billion gallon level expected to be proposed. But there are questions as to whether this was even the report issued to the Office of Management and Budget.
- Futures are also seeing technically related selling pressure as futures penetrated support zones and moved to their lowest levels in three years.
- While private sources are available, the market is working in somewhat of a vacuum as no export sales data is available and the USDA Crop Production and Supply & Demand Reports, originally due this morning, are not available due to the government shutdown. The path of least resistance is down in the absence of report data..
- Gulf basis for December delivery rose 1 cent early this morning, hinting exporters may be taking advantage of the price break and the government shutdown to increase their corn buys without the market's knowledge.
- South Korea rejected all offers on its tender for 55,000 MT of food-quality corn from the U.S. or South America, citing high prices.
Soybean futures continue to post double-digit losses through the November 2014 contract, with the nearby November contract down 19 cents.
- Soybean futures are under pressure as harvest continues to ramp up and technical-related selling moves into the market.
- Traders have shifted to the negative side as nearby contracts penetrated recent support and appear headed for a test of October lows.
- With harvest underway, hedge-related pressure has moved into the market as firms cover positions through the weekend. There will be no harvest progress update from USDA due to the government shutdown on Monday.
- However, rain is in the forecast for portions of the Corn Belt this week and early next week, which could slow harvest and ease hedge pressure.
- Traders are disappointed that USDA will not release its October crop reports. They expected the report to show a slight uptick in the size of the soybean crop from last month.
Wheat futures are generally higher with December through May contracts up 3 to 7 cents for all three wheat flavors.
- Wheat futures moved to the upside after slumping to weekly lows in the overnight trade.
- Crop concerns in the Black Sea region and improved demand prospects for U.S. wheat continue to have traders looking to the upside for wheat despite losses in corn futures.
- Futures are finding support from news some private firms have trimmed their Russian crop estimates, which raises expectations that U.S. will garner a larger share of global wheat business in the year ahead.
- Tighter global supply prospects have also resulted in EU wheat exports being on pace to set a record the 2013-14 season.
- Japan bought 101,892 MT of milling wheat, including 38,939 MT of U.S. wheat, according to the country's ag ministry.
- But traders remain cautious about adding to long positions after Egypt canceled its wheat tender yesterday because of high prices.
Live cattle futures are slightly higher while feeder cattle futures are moderately to sharply higher.
- Live cattle are seeing light support on reports some cash trading has occurred at prices 50 cents to $1 below futures, which would signal cash prices of around $127 to $128 in Kansas. But active cash cattle trade has yet to begun in other locations.
- Futures, especially feeder cattle futures, continue to gain support from reports of large death losses from last weekend's snowstorm in South Dakota.
- Feeder cattle are also gaining support from the slump to new for-the-move lows in corn futures.
- But buying interest is being tempered by some export news. According to a notice issued by USDA's Food Safety and Inspection Service, the Cactus, Texas, Swift Beef Co. plant is not eligible to ship beef to South Korea. Earlier this week, it was reported that the 22- MT shipment of beef to South Korea that was found to contain traces of Zilmax originated from a Colorado Swift Beef plant.
Lean hog futures are slightly weaker on but the October contract, which is slightly higher.
- Trading interest is sharply limited due to the lack of official USDA data on the cash hog and pork product markets.
- Concerns over how the new settlement process will play out for the October lean hog contract Monday has moved traders to the sidelines, as well.
- Forecasts for Saturday kill are varied as some sources call for 150,000 head but Urner Barry projects 110,000 to 115,000. Such confusion in the absence of USDA data has seen traders leave the market.
- Cash hogs are reported as steady to weaker.