Ahead of the Open (VIP) -- April 2, 2014

April 2, 2014 03:16 AM

Corn futures are called to open 1 to 4 cents lower amid light profit-taking.

  • Corn futures ended the overnight session 1 to 4 cents lower following back-to-back days of strong gains. May corn futures remained above the key $5.00 level.
  • There's little fresh news for the corn market to digest this morning, although traders still have Monday's key USDA reports on their minds.
  • A lower-than-expected corn acreage figure has turned traders' attention to bidding for 2014 acres, especially given the cooler-than-normal near-term weather outlook.


Soybean futures are called to open 1 to 5 cents higher on followthrough buying.

  • Soybean futures ended the overnight session 2 to 5 cents higher on followthrough from yesterday's gains.
  • May soybeans came within 4 cents of the key $15.00 level in overnight trade.
  • A return of speculative buying is supporting soybean futures, as investors look for a "hot market" to put their money.
  • On a fundamental basis, news that Agroconsult yesterday trimmed its Brazilian soybean crop estimate by 2.3 MMT to 86.9 MMT is supportive for the market.
  • Traders still have Monday's grain stocks data on their minds, as it reminded traders of the ultra-tight old-crop stocks situation.
  • Traders are also aware the recent rise in new-crop corn futures could "steal" some acres away from soybeans.


All wheat flavors are called to open 6 to 10 cents lower amid chart-based selling.

  • All wheat flavors ended the overnight session 6 to 10 cents lower, so key this morning will be if traders view losses as overdone or if they view signals the market has posted a near-term high as a sell signal.
  • This morning's followthrough selling confirms yesterday's violation of uptrending support, which strongly suggests the market has posted a near-term high.
  • Meanwhile, China sold 246,319 MT of its 871,525 MT of reserve wheat available for auction, which represents a softening of demand.
  • Traders continue to monitor the weather in the U.S. Southern Plains, as they expect next week's first official crop data to show the condition of the crop declined through the winter. But traders say this has been factored into prices.


Live cattle futures are called to open mixed on news of very light cash trade.

  • Live cattle futures are expected to see a choppy tone as traders weigh the discount nearbys hold to the cash market against expectations the cash market has posted a near-term high.
  • Very light cash cattle trade was reported yesterday in Nebraska at $150, which is down $2 to $4 from last week's trade in the region.
  • Due to recent weakness in the beef market, packers aren't willing to bid up for cattle as their focus has turned to improving negative profit margins.
  • Adding to ideas a near-term high has been posted is yesterday's slide in beef values. Choice beef values were $1.25 lower and Select softened $2.06; movement was again light at 119 loads.
  • Following yesterday's sharp losses, feeder futures could see a round of short-covering, especially given the softer tone in the corn market.


Lean hog futures are called to open mixed as traders reevaluate positions.

  • Lean hog futures are expected to see a choppy start following yesterday's strong gains that brought futures back into overbought territory.
  • Futures were supported yesterday by ideas Monday's losses were overdone, as traders believe losses to the pig crop were steeper than indicated by the Hogs & Pigs Report.
  • Meanwhile, the cash hog market is called steady to firmer today as packers are dealing with tight supplies. But a smaller-than-usual Saturday kill is being planned due to reduced available supplies.
  • Pork cutout values stabilized yesterday and movement was a disappointing 286 loads, which suggests values are still at levels that are trimming demand.
  • Increased price volatility of late is a sign the market is working on a high, although there is more room to the upside for nearby contracts that have recently moved to a discount to the cash index.
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