Market Snapshot, Noon CT (VIP) -- September 27, 2013

September 27, 2013 07:08 AM

Corn futures are 1 to 2 cents lower.

  • Corn futures are weaker on softening basis amid the advancing harvest.
  • However, losses have been limited due to spillover strength from the wheat market and weakness in the U.S. dollar index prompted by disappointing consumer sentiment data.
  • The market is digesting recent export news for signs prices may have fallen low enough to stimulate growth in export demand..
  • Traders are also looking ahead to Monday's Quarterly Grain Stocks Reports. Pre-report expectations are for USDA to peg Sept. 1 corn stocks around 688 million bushels. However, past reports have surprised the market and led to limit moves (often to the downside).
  • Gulf basis is unchanged in late-morning trading with the exception of a 2-cent decline for January delivery.


Soybean futures are 2 to 4 cents higher through the March contract, while farther-deferred contracts are narrowly mixed..

  • Mild short-covering on ideas recent losses have been overdone is supporting nearby soybean futures today.
  • The market is gaining some support from traders evening positions ahead of Monday's Quarterly Grain Stocks Report. Traders expect USDA to set 2013-14 carry-in at 126 million bu., which compares to 169 million bu. last year. This means price rationing will be necessary if realized, although that's not likely until harvest is much further along.
  • Export news remains positive for soybeans and the weaker U.S. dollar index today adds to that positive outlook.
  • However, the start up of harvest is pressuring basis at internal locations, which will limit buying interest in the near-term.
  • Light support also stems from reports farmers in Argentina are selling beans for export at a slower pace than last year as a hedge against inflation.
  • Gulf basis is unchanged in late-morning trading with the exception of a decline of 7 cents for January delivery.


SRW wheat futures are mostly steady to 5 cents higher, while HRW wheat is mostly 4 to 6 cents higher and HRS wheat is mostly 6 to 9 cents higher.

  • Wheat futures are higher on weakness in the U.S. dollar index and news of a sale of 121,600-MT wheat sale to an unknown destination for 2013-14. Of the total, 55,000 MT is HRW, 38,800 MT is soft white and 27,800 MT is HRS.
  • This morning's sale reminds traders U.S. wheat prices have become competitive on the world stage.
  • News out of the Black Sea Region, a competitor of U.S. wheat, is also supportive. Trade reports suggest Ukraine could see a sharp drop in winter wheat acreage due to excessive wetness across the country. Meanwhile, the head of Russia's Grain Union says the Russian 2013 grain crop will fall short of the ag ministry's target of 90 MMT.
  • In addition, reports from Canada suggest the quality of that nation's wheat crop could mean a boost in U.S. demand.
  • Traders are also reacting to technical signals that suggest wheat futures may have put in a low. However, several layers of tough resistance are still layered above current price levels.
  • Gulf SRW basis is unchanged in late-morning trading.


Live cattle futures are slightly higher. Feeder cattle futures are slightly higher in all but some of deferred contracts.

  • Live cattle futures are trading slightly higher in limited action as traders wait for cash cattle trade to begin.
  • Traders continue to look for steady to firmer cash trade compared with last week's $124 action in the Southern Plains. October futures already carry nearly a $4 premium to the cash market.
  • Showlist estimates are down in all locations except Texas this week and bids are already at $123 in the South.
  • Boxed beef prices weakened this morning with Choice boxed beef down 75 cents and Select down 14 cents. Movement is a very slow 84 loads.
  • Feeder cattle have firmed slightly on the small declines in the corn market.


Lean hog futures are slightly higher.

  • Trade activity is limited as traders prepare for this afternoon's Quarterly Hogs & Pigs Report. Traders expect it to show All Hogs & Pigs at 98.6% of year-ago levels, though the data is also expected to reflect plans to expand the herd.
  • Cash hogs are steady today even though packers are enjoying wide profit margins. Some plants have reduced kill needs due to decline in supplies.
  • Despite declines in the cash hog index recently, it still holds a $4 premium to October futures, which is limiting selling pressure.
  • The pork cutout value eased 12 cents this morning but movement picked up to 176.7 loads.
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