Markets Still Trying To Get Back To 'Normal'

October 28, 2013 01:15 AM

What Traders are Talking About:

Overnight highlights: As of 6:15 a.m. CT, corn futures are steady to fractionally lower, soybeans are 3 to 5 cents lower and wheat futures are narrowly mixed. A choppy to weaker tone is expected to linger into the daytime hours. Cattle futures are expected to open with a firmer tone, while hogs are called mixed.


* More catch-up data this week. Government agencies will continue to play catchup on the release of data that was delayed due to the 16-day government shutdown. USDA will release weekly export sales data for the weeks ended Oct. 10, 17 and 24 on Thursday. USDA will also release its Cattle on Feed and Cold Storage Reports that day. On the economic front, the Fed will conduct its two-day Federal Open Market Committee meeting Tuesday and Wednesday. Economists aren't expecting any movement on the tapering of monthly bond purchases.

The long and short of it: Markets are still trying to digest all the backlogged government data. After this week, things should be back to "normal."

* Wet week ahead. Harvest activity will be slowed by an active weather pattern that's expected to produce rainfall across virtually the entire Corn Belt this week. But traders are expecting USDA to report this after that soybean harvest past three-quarters complete and corn harvest near 60% done as of Sunday. Therefore, concern over the harvest delays is limited as traders see the stoppage as temporary.

The long and short of it: Traders are focused more on crop size than temporary harvest delays at this time. Due to the government closure, USDA didn't release its October crop reports, which is adding to the uncertainty on crop size.

* Chinese soy imports expected to rise in October, drop in November. China is forecast to import 5.21 MMT of soybeans this month, according to the Ministry of Commerce. That would be up 10.9% from September soybean imports of 4.7 MMT, but down from the ministry's previous forecast of 5.85 MMT. The ministry sees Chinese soybean imports dropping to 2.97 MMT in November.

The long and short of it: Chinese demand is an underlying source of support for the soybean market, but consistent purchases are needed to fuel sustained buying in soybean futures.


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