Market Snapshot, Noon CT (VIP) -- September 17, 2013

September 17, 2013 06:59 AM
 

Corn futures are 1 to 2 cents lower and just above their lows for the day.

  • Corn futures opened higher with corrective gains on ideas recent losses were overdone but buying interest quickly disappeared as soybeans moved lower.
  • Some early support came from USDA's Farm Service Agency updated certified acreage data which showed Prevent-Plant corn acres at 3.573 million acres, up from 3.411 million acres in August. Planted + failed corn acres are now 91.428 million versus 88.771 million in August.
  • Our weighted Crop Condition Index for corn is virtually unchanged from last week at 342 on a 0 to 500 scale (top being perfect). Traders are no longer paying much attention to crop conditions with harvest getting started.
  • Gulf corn basis is unchanged in late-morning action. Basis levels had weakened by 5 cents for September delivery and 2 cents for October delivery in early morning trading.

 

Soybean futures have pressed lower after opening with slight gains. November and January futures are posting double-digit losses, with other contracts 1 to 4 cents lower.

  • After posting double-digit increases during the overnight session, soybean have moved to the negative on thoughts near-term precipitation will aid crop development for the late-maturing crop.
  • Rains pushed through western Iowa and other areas of the western Corn Belt this morning with more due along with cool temperatures in the forecast.
  • Futures got an early lift from USDA's Prevent-Plant soybean acreage figures. The total is now 1.687 million versus 1.619 million last month. Planted + failed soybean acres are now 74.659 million versus 72.061 million last month.
  • November soybean futures are probing yesterday's support and the key Aug. 26 gap area. Support exists in that gap down to $13.31 1/2.
  • Gulf basis is unchanged for September and October delivery in late-morning trading after slipping 2 cents for September delivery early morning. Basis is 8 cents lower for November delivery.

 

Wheat futures are narrowly mixed heading into afternoon trade.

  • Wheat futures have struggling to hold slight gains in the face of spillover selling from corn and soybeans.
  • Recent rains on the Plains are recharging soil moisture supplies as winter wheat seeding gets underway. The improving soil moisture conditions are seen as price-negative.
  • Futures are gaining light support from a weaker U.S. dollar index, but traders need to see actual export business completed to turn positive.
  • Gulf SRW basis is 15 cents stronger for September delivery and unchanged for other delivery periods. Basis was 5 cents higher for October delivery in early trading. The stronger basis hints at some possible light export business.

 

Live cattle and feeder cattle futures have extended earlier losses to trade slightly to sharply lower.

  • Live cattle are lower in corrective trading as traders are reluctant to buy futures as they are already trading at a premium to last week's cash trade.
  • October live cattle have penetrated support at last week's low of $124.80 and are testing support at the Aug. 2 low of $124.12 1/2.
  • Choice boxed beef is off 3 cents and Select beef is 10 cents lower, while movement is only 105 loads this morning. Higher boxed beef prices and improved movement are likely needed to boost packer willingness to bid up for cash supplies.
  • Cash sources indicate showlist estimates are up sharply in Nebraska this week, but down in Texas, Kansas and Colorado.
  • Feeder cattle futures are being pressured by losses in live cattle futures and profit-taking.

 

Lean hog futures are slightly lower with the October contract leading losses.

  • Profit-taking is the main feature today following yesterday's sharp runup in fall- and winter-month lean hog futures.
  • Traders are cautious the return to cooler temperatures across the Midwest will result in an increase in average market weights.
  • However, the October contract sports a near-$3 discount to the cash index. That discount is limiting selling interest.
  • Cash hog bids are mixed across the Midwest this morning amid varied packer demand. With cutting margins falling into the red, some plants have slowed their attempt to secure slaughter supplies.
  • However, the pork cutout value rose 45 cents this morning and movement is a strong 174.87 loads.
     
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