Market Snapshot, Noon CT (VIP) -- October 21, 2013

October 21, 2013 07:09 AM
 

Corn futures continue to trade fractionally to 2 cents lower.

  • Corn futures have chopped on either side of unchanged today as hedge-pressure related to harvest activity continues to weigh on the market. Also, yields continue to come in "better-than-expected."
  • The market is finding some support from this morning's weekly export inspections report, which showed a total of 32.272 million bu. passing inspections. That is about 10 million bu. higher than the previous week and above trade expectations. It signals prices have fallen far enough to stimulate export interest.
  • Traders are preparing for an update on harvest progress from USDA this afternoon, the first such update since Sept. 30. A Reuters poll of analysts shows they expect harvest to come in near 42% complete as of Sunday. That compares to 87% compete a year ago and the five-year average of 49% complete.
  • The market is finding light support from forecasts for light rain and snow for Iowa and some eastern Belt states which could slow the already well delayed harvest.
  • The market is also factoring in Friday's post-market-close release of the weekly Export Sales Report that showed corn sales of 775,200 MT for the week ended Sept. 26, which topped expectations.
  • Gulf basis is 2 cents lower for immediate delivery in late-morning trading, unchanged for November and December delivery and a penny weaker for January and February delivery.
  • The Energy Information Administration (EIA) this morning released ethanol production data for the week ending Oct. 11. It shows ethanol production improved by 1,000 barrels per day (bpd) to 869,000 bpd and ethanol stocks increased marginally to 15.4 million barrels.

 

Soybean futures continue to trade near their daily highs with prices mostly 6 to 8 cents higher.

  • Traders are looking ahead to a reduction in hedge-related pressure on ideas soybean harvest is well past the halfway point.
  • Private polling by Reuters indicates traders expect USDA will peg the soybean harvest 62% completed when it issues its update this afternoon. That compares to 80% completed a year ago and 69% completed on the five-year average.
  • The trade is finding support from news USDA announced a 235,000 MT soybean sale to unknown destinations for 2013-14 delivery this morning.
  • This follows news of strong export sales the week ended Sept. 26 of 860,700 MT for 2013-14 and 43,000 MT for 2014-15 delivery.
  • Beans are also finding support from this morning's weekly export inspections report from USDA, which showed inspections of 59.325 million bu., nearly 12 million bu. better than the previous week and well above pre-report expectations.
  • Gulf basis is a penny weaker for October and November delivery and unchanged for December through February delivery.
  • Traders are shrugging off the stronger U.S. dollar index.

 

Wheat futures have pared early losses to trade 2 to 5 cents lower.

  • Profit-taking continues to dominate trading this morning along with strength in the U.S. dollar index.
  • In addition, weekend rains in Kansas and Oklahoma are thought to be beneficial for the winter wheat crop. Similar weekend rains are seen benefiting the Argentine wheat crops.
  • Traders are disappointed in today's weekly export inspections reports, which came in at 20.852 million bu., down 6.637 million bu. from last week and short of expectations.
  • On Friday, USDA reported wheat export sales for the week ended Sept. 26 of 837,800 MT, topping expectations. But the impact of this news is being tempered by the delayed nature of it.
  • Gulf SRW wheat basis is steady for October through December delivery and 2 cents firmer for January and February delivery.

 

Live cattle futures are slightly higher in the front three months. Feeder cattle futures are slightly weaker in the lead October contract but slightly stronger in deferred contracts.

  • After an initial wave of profit-taking at the open, cattle futures have moved back to the plus side on firmer wholesale beef prices.
  • October futures are gaining support from cash cattle prices of $129 to $131 in the Southern Plains last week.
  • Supporting the market is news from USDA Choice boxed beef rose $1.69 and Select gained $1.04. However, movement is a light 77 loads.
  • Feeder cattle futures are benefitting from the turnaround in live cattle futures, slight weakness in corn futures and expectations of tightening supplies.

 

Lean hog futures continue to posting slight losses this morning.

  • Traders continue to look for hog supplies to build and pressure cash prices.
  • Average hog weights in Iowa and southern Minnesota rose 2.7 lbs. in the week ended Oct. 12.
  • But cash prices are holding about steady to start the week.
  • USDA reports the pork cutout slipped 18 cents today but movement is a positive 185.87 loads.
  • Friday's data that showed weekly pork export sales surged to 21,800 MT the week ended Sept. 26 is helping to limit pressure.
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