Tuesday’s Early Calls

| June 11, 2013 | 10:42 am
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Harold House with the Kansas City Trade Group suggests the markets could be quiet until the release of tomorrow’s USDA Crop Production and Supply and Demand Report.  Click below to hear KMZU’s Mandy Young talk with Harold House from the Kansas City Trade Group.

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Early Livestock:

Expect hog contracts to open moderately higher, supported by follow-through buying and bullish fundamentals. Live and feeder futures seem set to start out on a firm basis thanks to light short covering recovering beef cut-outs.

Cattle:     Cash: Steady-$1 Lower     Futures: 10-30 Higher  Live Equiv.  $137.50  + $0.70

Cattle buyers and sellers will be lazily marking time with neither bothering to voice serious bids and asking prices. If required to start a conversation, feedlot managers would probably suggest asking prices around $125 in the South, and $200-plus in the North. Significant trade volume could easily be delayed until the second half of the week. Live and feeder contracts should open moderately higher, girded by short covering, technical buying, and recent cash premiums.

Hogs:       Cash:  $0.50-$1 Lower      Futures: 10-30 Higher   Lean Equiv.  $105.22 + $1.41

The definite hunger for market-ready hogs remains quite deep. Whenever buyers start a new week swing for the fence in terms of higher bids, you know they consider slaughter supplies to be seriously tight. And the fact that greater spending on Monday did not succeed in moving significant numbers cannot be reassuring in that regard. Look for another round of higher bids this morning. Lean futures are ready to start out on a firm basis, supported by bullish fundamental and follow-through buying.

Early Grains:

Corn and soybeans were trading higher early Tuesday morning after spending most of the overnight session on the plus side of unchanged. Activity seemed to be light, though spread action in both indicated renewed commercial buying in old-crop markets. Wheat contracts drifted lower despite a lower U.S. dollar index.

Outside Markets:

Most outside commodities were lower on weaker global equity markets. The Dow Jones Industrial Average closed 9.53 points lower Monday at 15,238.59. The overnight session saw the Dow Jones futures trade 109-points lower, indicating U.S. stocks could see heavy selling interest Tuesday. The overnight crude oil market was $0.50 lower at $95.27 while Brent crude was $0.77 lower at $103.18. The August gold contract lost $18.30 to close at $1,367.70, while the U.S. dollar index lost 0.242 at 81.404. Soybeans at the Dalian Exchange were still closed while Malaysian palm oil contracts were higher.

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