Ahead of the Open (VIP) -- April 17, 2013

April 17, 2013 03:21 AM

Corn futures are expected to favor a slightly weaker tone on the open.

  • Corn futures ended the overnight session mixed, but favored a weaker tone. Old-crop futures ended mostly 1 1/2 cents lower, with new-crop futures narrowly mixed.
  • Strength in the dollar index this morning is tempering buying enthusiasm in the commodity markets.
  • There's little other fresh news for the market to digest as traders -- at this point -- don't seem concerned about corn planting delays although talk in the country is that USDA's March 28 corn acreage figure is the high-watermark of the year.
  • Meanwhile, Gulf corn basis is 4 cents lower for immediate shipment to stand 59 cents over May futures to suggest a softening of demand.


Soybean futures are called mixed, with nearbys firmer amid light bull spreading.

  • Old-crop soybean futures ended the overnight session steady to a penny higher, with new-crop futures steady to 5 cents lower.
  • Concerns about Chinese feed demand continue to limit buying in the soybean pit. The number of identified H7N9 bird flu cases in the country continues to climb.
  • Gulf soybean basis is 3 cents weaker for immediate delivery to stand 90 cents above May futures to suggest demand has softened.
  • Pressure on new-crop futures is coming from talk that rain-related planting delays could result in a switching of acres to soybeans, although traders aren't overly concerned about it at this point.


Wheat futures are called 1 to 4 cents weaker on strength in the dollar index.

  • Chicago and Kansas City wheat futures ended the overnight session mostly 3 to 4 cents lower, with Minneapolis mostly 1 to 3 cents lower.
  • Pressure on Minneapolis futures is being muted by concerns about spring wheat planting delays, as another winter storm is in the forecast for the Dakotas this week.
  • There is also talk of acreage abandonment in HRW wheat country after last week's freeze event, another freeze event expected this week and severe weather damaging a portion of the crop overnight.


Live cattle futures are called to open mixed as traders wait on active cash cattle trade.

  • April live cattle futures are trading in line with light cash cattle trade that occurred earlier in the week at $125 in Iowa and Texas.
  • But remaining feedlots are not willing to sell cattle $2 below last week's cash trade as they note tight market-ready supplies.
  • However, packers have been dealing with tight profit margins for months and are hesitant to raise bids.
  • Choice beef values rose 56 cents and Select was up 2 cents on solid movement of 192 loads yesterday. If movement continues to improve this week, it would suggest packers are preparing for spring features.


Lean hog futures are called to open steady to weaker on concerns about the cash market.

  • The cash hog market is called steady to weaker as packers say they have this week's needs secured.
  • But if the pork cutout market continues to improve, it would also boost packers' demand for cash hogs.
  • Meanwhile, pork cutout values improved 60 cents yesterday to lift packers' profit margins and movement picked up to 422.7 loads.
  • Meanwhile, May lean hog futures are trading at around a $5 premium to the cash index, which signals traders believe a near-term low has been posted.
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