What Traders are Talking About:
Overnight highlights: As of 6:00 a.m. CT, corn futures are trading around 1 cent higher, soybeans are mostly 11 to 14 cents higher and wheat futures are fractionally to 3 cents higher. Key today is how long the corrective buying lasts. Cattle and hog futures are expected to open firmer this morning.
* Beans find support. Despite a very modest uptick in crop condition ratings and increased harvest activity across the Midwest, soybean futures are posting double-digit gains this morning, suggesting the market may have found a short-term low. To signal a low is in place, November soybean futures have two clear hurdles they must clear, $13.33 and $13.48 -- the June high and the top of the Aug. 26 chart gap, respectively. Closing above these levels would signal recent price action was a bear trap.
The long and short of it: Finding buying interest in the face of building harvest activity won't be easy, but soybeans do have bullish long-term fundamentals to pull support from as carryover is projected to rise a modest 25 million bu. during the 2013-14 marketing year to a still-tight 150 million bushels.
* Corn ratings improve more than expected, beans don't meet expectations. USDA's weekly crop conditions ratings showed a 2-percentage-point increase in the "good" to "excellent" categories for corn, while there was no change in the percentage of the soybean crop rated in the top two categories. Traders were expecting a 1-point rise in corn and a 2-point increase for soybeans. When USDA's weekly crop condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (0 to 500 point scale), the corn crop improved 2 points to 344, while the soybean crop firmed 1 point to 335. For corn, Iowa showed the most improvement, while there wasn't any notable movement in individual state soybean ratings.
The long and short of it: Traders are starting to put less focus on crop ratings and more on harvest progress/results. But a lack of improvement in the "good" to "excellent" categories is supportive for beans this morning.
* Frozen meat stocks lower than expected. USDA's monthly look at meat stocks in frozen storage showed both beef and pork stocks below levels traders expected at the end of August. Pork stocks as of Aug. 31 totaled 540.028 million lbs., which was roughly 13.3 million lbs. less than the average trade guess of 553.3 million pounds. Pork stocks declined 0.7% from July and came in 7.8% under year-ago.
Beef stocks at the end of last month totaled 433.842 million pounds. The average pre-report guess pegged beef stocks at 457.1 million pounds. Beef inventories declined 6.2% from July, but were 0.2% above year-ago.
The long and short of it: The Cold Storage data should help keep the hog market well supported and gives cattle traders a reason to build off Monday's price gains.
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