Market Snapshot, Noon CT (VIP) -- April 28, 2014

April 28, 2014 07:08 AM
 

Corn futures continue to trade fractionally to 2 cents higher this morning.

  • The massive weather system mired over the central U.S. has halted planting progress over most of the Midwest and is expected to continue to dump significant rain on the Corn Belt.
  • The forecast does not improve much once the system moves on as it is expected to be followed by more unsettled weather and cold temps.
  • Forecasts for next week also call for more cold and rain, which will continue the delay corn planting even more.
  • Traders look for USDA to report corn planting progress at 21% completed in this afternoon's report. That compares to the average pace of 28%.
  • Traders are disappointed in this morning's weekly export inspections report, which came in at 1,156,332 MT. The figure is down 476,818 MT from the previous week and fell below trader expectations.
  • 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.
  • Interior and Gulf basis levels are reported as steady this morning.

 

Soybean futures are 4 to 5 cents lower in all but the front-month two contracts, which are up 1 to 5 cents.

  • May futures have again moved above the key $15.00 area on a favorable weekly inspections figure from U.S. This stopped the profit-taking that had pulled May soybeans under that area after strong overnight gains.
  • New-crop are under pressure as the talk of corn planting delays builds, boosting odds soybean plantings will meet record-high planting intentions.
  • The trade looks for USDA to release its first crop progress report for soybeans this afternoon. Traders look for planting to stand at 3% complete compared to the average pace of 5% done at this point.
  • Today's weekly export inspections report is providing support for old-crop soybeans. It came in at 254,299 MT, which is up 100,336 MT from the previous week and above expectations.
  • 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.
  • Both interior and Gulf soybean basis levels are reported as steady in thin trade.

 

SRW wheat futures are down 4 to 7 cents, while HRW and HRS wheat are narrowly mixed.

  • Profit-taking is dominating wheat trading today after prices moved higher in early trade.
  • Weather and renewed concerns about exports in the Black Sea region lifted wheat futures early before the profit-taking set in.
  • Traders initially favored in the upside in wheat as the weekend's rains largely missed the Southern Plains, 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 tensions in the Black Sea region are a focus, but traders feel prices have built in most of that news -- at least until it becomes more clear significant export disruptions are occurring.
  • Weekly wheat export inspections of 631,021 MT is supportive as this is up 122,893 MT from the previous week and above trade expectations.
  • Traders look for USDA to rate the wheat crop anywhere from 33% to 36% "good" to "excellent" in this afternoon's crop condition report versus 34% in these categories last week. This is basically unchanged from a week earlier and below the five-year average of 49% good to excellent.

 

Live cattle futures are posting moderate gains while feeder cattle futures are posting strong gains.

  • Live cattle futures are trading higher due to the friendly Cattle on Feed Report Friday that showed Placements and On Feed numbers below expectations.
  • Gains in futures were muted initially, however, due to the steady to lower cash cattle trade on Friday. Sales took place at $145 to $146 in the Southern Plains and at $146 to $148 in Nebraska. This was steady to $2 below the week prior.
  • The wholesale beef market is slightly negative this morning, with Choice beef down 9 cents and Select beef off 58 cents. Movement improved to 98 loads, however.
  • The rise in cattle futures and tight supply situation have feeder cattle futures trading higher.

 

May through August lean hogs are steady to slightly lower, while deferred months are slightly higher.

  • Lean hog futures have trimmed earlier losses -- largely thanks to technical trading.
  • June futures saw prices bounce after touching the 14-day moving average and the April uptrend line. The bounce, if it holds, keeps that contract in the uptrending channel that has dominated trading since the spike low on April 9.
  • Futures started the day under pressure on fund liquidation and lower cash hogs prices. Bids are 50 cents to $2 lower.
  • The market is now gaining some support from the wholesale pork market. The pork cutout value surged $4.04 today and movement picked up to 143.03 loads. While not outstanding, it suggests movement today could exceed the abysmal 217.21 loads that changed hands on Friday on lower prices.
  • The combination of lower cash hog prices and stronger wholesale pork prices have lifted packer cutout margins back into the black.
  • Deferred contracts are finding some support from mild bull spread unwinding and uncertainty about the impact of the porcine epidemic diarrhea virus (PEDV).
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