Market Snapshot, Noon CT (VIP) -- October 28, 2013

October 28, 2013 06:57 AM
 

Corn futures continue to trade mostly 7 to 9 cents lower with December futures leading declines.

  • The rapid harvest pace over the weekend, spillover pressure from the bean market and a stronger U.S. dollar index are pressing corn futures lower.
  • As a result, traders are paying little attention to USDA's announcement that an unknown destination bought 103,600 MT of corn for 2013-14 delivery.
  • USDA reports 26.516 million bu. of corn were inspected for export the week ending Oct. 24. This was a decline of 5.801 million bu. from the previous week but within pre-report expectations.
  • Gulf basis is listed as unchanged in late-morning trading after firming 3 to 4 cents for October and November delivery in early morning trading.
  • A Reuters poll of analysts shows they expect USDA to report corn harvest was 52% complete as of Sunday. Traders believe this signals the bulk of harvest-related hedge pressure will soon ebb.

 

Soybean futures remain sharply lower with losses in the teens to 20s through July 2014 futures. November futures continue to lead the decline.

  • Profit-taking continues to weigh heavily on the market along with strength in the U.S. dollar index.
  • Some traders cited a strong weekend harvest pace as for pressure on futures, but interior cash bids are reportedly holding steady, suggesting very little farmer selling.
  • The profit-taking was triggered when nearby contracts dipped below the psychological $13.00 support level. That dip triggered sell stops which pressured prices lower.
  • China's Ministry of Commerce has lowered its soybean import forecast for the month by 640,000 MT to 5.21 MMT. This still represents a 10.9% increase from September.
  • A Reuters poll indicates analysts expect USDA to report harvest was 78% complete as of Sunday.
  • Traders are ignoring USDA's announcement of a 115,000-MT soybean sale to China and 115,000-MT sale to unknown destinations, all for 2013-14 delivery.
  • Traders are also shrugging off the large export inspections figures released by USDA this morning. USDA reports 83.604 million bu. were inspected for the week ending Oct. 24. Export inspections surged 23.711 million bu. from last week and came in well above expectations.
  • Gulf basis is steady for immediate to January delivery and 6 cents higher for February delivery in late-morning trading.

 

Wheat futures continue to trade 8 to 9 cents lower in the SRW market, while HRW and HRS wheat are 3 to 6 cents weaker.

  • Wheat futures are lower on spillover pressure from corn and soybeans and strength in the U.S. dollar index.
  • HRW wheat futures are lower on expectations of positive crop ratings from this afternoon's Crop Progress and Condition Report.
  • Wheat needs a dose of fresh demand news to keep bulls interested.
  • Gulf SRW basis is steady for all delivery periods in late-morning trading.
  • Traders are disappointed over today's export inspections report from USDA, which shows only 16.305 million bu. were inspected the week ended Oct. 24, down more than 4 million bu. from the week prior and short of expectations

 

Live and feeder cattle futures are slightly to moderately higher.

  • Live cattle futures are higher on a stronger wholesale market today and on last week's record-setting $132 to $134 cash cattle trade.
  • Tighter showlists has traders looking for steady to stronger cash prices.
  • Meanwhile choice boxed been jumped $2.44 today, taking Choice to $203.41 per cwt. Select cuts surged $2.63 to $188/03 per cwt. But movement was light at 59 loads.
  • The surge is helping packer margins, which remain in the red.
  • Declines in corn futures coupled with strength in live cattle futures are boosting feeder cattle futures.

 

Lean hog futures are slightly to moderately higher.

  • Hog futures are stronger on firming wholesale prices and a positive technical picture.
  • Prices have rallied contra-seasonally, which has traders very cautious as they look for cash prices to weaken on rising supplies. However, the front-month contract remains at a discount to the cash hog index.
  • Supplies are rising and cash hog prices are listed as steady to $1 lower today.
  • Lofty beef prices continue to lift pork cuts, with the pork cutout value rising 28 cents today. Movement is a moderate 165.47 loads.
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