Market Snapshot, Noon CT (VIP) -- September 30, 2013

September 30, 2013 07:10 AM

Corn futures are mostly 8 to 10 cents in reaction to USDA's report data.

  • Corn futures are lower on reaction to this morning's bearish Quarterly Grain Stocks Report. USDA pegged Sept. 1 grain stocks at 824 million bu., down 17% from a year ago but higher than pre-report expectations of 688 million bushels.
  • December futures have spiked support at the August low of $4.45 3/4, which triggered some sell stops, though selling interest hasn't been strong at that level yet.
  • USDA reports weekly corn export inspections reached 21.912 million bu., which was within expectations and was nearly 4 million bu. over week-ago levels. This hints recent lower prices are building U.S. export demand.
  • The trade looks for USDA to report 15% of the nation's harvest is complete, which will be the slowest pace in four years. This would compare to the five-year average of 20%. The start up of harvest will keep pressure on basis near term. Basis at interior points weakened again this morning.
  • Gulf basis is unchanged for October through December delivery and 1 cent firmer for January delivery in late-morning trade.


Soybean futures are down sharply with losses of 19 to 33 cents in the November through August 2014 contracts.

  • Futures are down sharply due to the bearish Quarterly Grain Stocks Report, which showed 141 million bu. on hand Sept. 1. The traded expected 126 million bushels. USDA added 18.6 million bu. to the size of the 2012 soybean crop.
  • Bull spread unwinding is being seen and November futures are testing support at $12.80. A plunge through that level erases all of the runup from mid-August.
  • This afternoon's update from USDA is expected to show harvest at 11% complete as of Sunday. This would compare to the five-year average of 19% completed.
  • USDA says weekly export inspections totaled 14.288 million bu., down around 2.5 million bu. from last week and just below traders' expectations.
  • Basis at interior points weakened again today, but Gulf basis is steady for immediate to November delivery, 2 cents higher for December delivery, but 7 cents lower for January delivery.


Wheat futures are mixed with SRW down 1 to 3 cents, HRW up 3 to 8 cents and HRS up 2 to 5 cents.

  • Traders are shrugging off a slightly bigger wheat crop estimate, but are reacting positively to the friendly Quarterly Grains Stocks Report, which showed less wheat in storage on Sept. 1 than anticipated.
  • USDA this morning reported wheat stocks as of Sept. 1 totaled 1.855 billion bu., down from re-report expectations of 1.938 billion bushels.
  • USDA also reported all wheat production is projected to total 2.128 billion bu., slightly more than trade expectations of 2.121 billion bushels.
  • In addition, traders are also reacting to sharp losses in the U.S. dollar index, which adds to the view the U.S. wheat is becoming more competitive on the world market.
  • But SRW futures have turned weaker in spillover selling from corn.
  • Weekly wheat export inspections tallied 32.973 million bushels. That figure was within expectations but declined 10 mil. bu. from last week's strong tally.
  • Gulf SRW basis is steady in late-morning action.


Live cattle futures are slightly weaker, while feeder cattle have firmed.

  • Live cattle futures are weaker on end-of-month position squaring and light profit-taking after recent gains.
  • Selling is being limited by stronger cash cattle trade late last Friday.
  • However, the front-month contract already carries a $2-plus premium to the cash market, which is encouraging light profit-taking to start the week.
  • The boxed beef market is providing some support with Choice boxed beef up $1.00 and Select up $1.22 this morning. But movement is a light 88 loads.
  • Feeder cattle futures have firmed after a weaker start, thanks to weakness in corn.


Lean hog futures are moderately to sharply lower heading into afternoon trade.

  • Traders are reacting to Friday's bearish Quarterly Hogs & Pigs (H&P) Report, which showed nearly all categories higher than expectations.
  • Futures gapped lower on the open but have trimmed those losses since. The December contract, however, is bearing the brunt of the losses.
  • End-of-the-month position evening is contributing to the losses as well as traders pocket profits after recent gains.
  • Selling in October futures is being somewhat limited by the $4.50-plus discount it maintains to the cash hog index.
  • Cash hog bids are steady to 50 cents weaker. Hog runs are on the rise and demand is varied. Packers continue to enjoy wide profit margins.
  • The pork cutout market is providing some support. The cutout value rose 74 cents this morning and movement is a moderate 158.2 loads.
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