Market Snapshot, 10:00 am CT (VIP) -- April 28, 2014

April 28, 2014 05:10 AM
 

Corn futures are steady to 1 cent higher this morning.

  • Today is day two of a four-day weather system that is expected to dump significant rain on the Midwest. This system is expected to be followed by more unsettled weather and cold temps. This will result in corn planting progress falling farther behind the average pace.
  • The outlook for next week is also unfavorable as the cold, wet pattern is expected to persist.
  • Traders expect this afternoon's crop condition report to show planting progress roughly around 20% complete, though the guess range is wide.
  • Traders expect this morning's weekly export inspections report to reflect ongoing strong demand for U.S. corn.
  • The U.S. has slapped more sanctions on Russia regarding the Ukraine situation, renewing concerns about export disruptions.
  • Gulf basis is steady for April delivery this morning.

 

Soybean futures have pared early gains to trade slightly lower in all but the front-month contract.

  • Profit-taking has pulled May soybeans back to the key $15.00 level after strong overnight gains.
  • Early support for old-crop beans came from tight carryover supplies and talk Chinese demand for beans will rebuild this summer.
  • Buying in new-crop, on the other hand, is being limited by increased talk of corn planting delays. This makes it more likely soybean plantings will meet record-high planting intentions.
  • AgRural today said it expects a record-large Brazilian soybean crop of 85.57 MMT for 2013-14. This is the firm's final forecast.

 

Wheat futures have softened to trade 6 to 8 cents lower in the SRW market and mostly 2 to 4 cents lower in HRS and HRW wheat.

  • Early gains in the wheat market have given way to profit-taking.
  • Support initially came from the weather and renewed concerns about exports in the Black Sea region.
  • Weekend rains largely missed the Southern Plains over the weekend, and mostly dry conditions are expected for the area this week. Frost and freeze events are expected this week from the High Plains to northern Texas.
  • Snow is falling in parts of the Northern Plains today and more precip and chilly temps are expected to slow spring wheat planting this week.
  • Heightened geo-political tensions in the Black Sea region have renewed talk about export shipment disruptions. However, traders are hesitant to push prices higher on such speculation as past such moves have been overdone.

 

Live and feeder cattle futures are posting slight gains in most contracts this morning.

  • Live cattle futures are benefiting from a friendly Cattle on Feed Report Friday that showed Placements and On Feed numbers below expectations.
  • However, steady to lower cash cattle trade on Friday is keeping a damper on buying interest. Sales took place at $145 to $146 in the Southern Plains, down $1 to $2 from the week prior. In Nebraska, trade took place at $146 to $148, steady to $2 below the week prior.
  • The front-month contract is in line with the low end of this range, while June live cattle are well below these prices.
  • The combination of rising wholesale beef prices last week and lower cash cattle trade have pulled packer profit margins near breakeven. They had been deeply negative for a long time.
  • On Friday there were some signs prices may have risen enough to slow demand or that retailer buying for spring grilling is wrapping up. Choice boxed beef slipped 97 cents and Select dipped 43 cents. Movement was light at 114 loads.
  • Strength in the corn market is weighing on nearby feeder cattle futures, while the tight supply situation is lifting deferred months.

 

May through August lean hogs are mostly lower while deferred months are narrowly mixed.

  • The pork market continues to sputter, which is pressuring nearby contracts. On Friday a 64-cent drop in the pork cutout value failed to spur improved movement. Just 217.21 loads changed hands.
  • Some packers have reduced kill hours due to tight supplies and negative margins.
  • Therefore, cash hog bids are mostly 50 cents to $2 lower today.
  • Packer profit margins dipped into negative territory last week, but lower cash prices have helped pull them marginally into the black to start the week.
  • Selling in deferred contracts is being limited by some mild bull spread unwinding and uncertainty about the impact of the porcine epidemic diarrhea virus (PEDV).
     
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