Ahead of the Open (VIP) -- April 19, 2013

April 19, 2013 03:16 AM
 

Corn futures are called to open mixed amid bull spreading.

  • Corn futures ended the overnight session mixed, with nearbys mostly 1 to 3 cents higher and deferreds 1 to 3 cents lower.
  • Bull spreading was the featured activity overnight as there's little fresh news for the market to digest.
  • Further indications Japan's corn use continues to decline limited buying, as the country's ag ministry said corn in feed rations dropped to 42.3% in February, compared to 44.6% a year-ago.
  • Traders are paying little attention to planting delays in the Midwest, as they say there's little plenty of time to get the crop planted during the optimal planting window.
  • Meanwhile, Gulf corn basis is 3 cents higher for immediate delivery to stand 56 cents above May futures to reflect the tight supply situation and possible fresh demand.

 

Soybean futures are called 1 to 2 cents lower after futures eroded in late overnight trade.

  • Soybean futures ended the overnight session steady in the May contract, with the rest of the market mostly 2 cents lower.
  • Concerns about the bird flu situation in China, as officials have not yet found the source of the outbreak, continues to weigh on soybean futures.
  • Gulf soybean basis is steady for immediate delivery to stand 95 cents above May futures, but it has softened by 5 cents for May delivery.

 

Wheat futures are called 1 to 5 cents lower on profit-taking.

  • Wheat futures ended the overnight session marginally to 4 cents lower in Chicago, 3 to 6 cents lower in Kansas City and mostly around a penny lower in Minneapolis.
  • Traders did not focus on the overnight freeze event which took another nip at the HRW wheat crop in the Central and Southern Plains. Freezing temps were seen as far south as northern Texas.
  • Meanwhile, wet and cold conditions in the Northern Plains are keeping producers from advancing spring wheat planting.
  • More favorable outside markets could help support wheat futures on the open, as the dollar is weakening and gold is stronger.

 

Live cattle futures are called to open mixed as traders position for the Cattle on Feed Report and wait on cash trade to begin.

  • Live cattle futures favored a weaker tone in mixed trade yesterday and are expected to see a choppy start this morning.
  • Traders will focus on evening positions ahead of this afternoon's Cattle on Feed Report, which is expected to show On Feed at 93.9%, Placements at 99.1% and Marketings at 93.5% of year-ago levels.
  • But while the COF Report will serve as a reminder of the tightening supply situation, traders are more interested in demand.
  • Improvement in the boxed beef market this week signals retailers are preparing for spring grilling features, although traders remain concerned about the near-term weather forecast that remains cool for much of the nation.
  • Traders are also watching on active cash cattle trade. Given improvement in boxed beef prices, feedlots are holding out for higher prices after light cash trade at $2 lower than last week -- $125 -- was seen earlier this week.

 

Lean hog futures are called to open mixed as traders even positions ahead of the weekend.

  • Lean hog futures softened into the close yesterday to finish mixed and more choppy trade is expected this morning as traders even positions ahead of the weekend.
  • This week's strengthening pork cutout market suggests retailers will aggressively feature pork soon, as movement of nearly 400 loads was seen yesterday and pork cutout values rose 98 cents.
  • As a result, packers have seen profit margins improve dramatically this week, which should improve demand for cash supplies next week.
  • But nearby futures have already built in a sizable premium to the cash index, which could weigh on nearby futures this morning.
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