Ahead of the Open (VIP) -- April 30, 2013

April 30, 2013 03:14 AM
 

Corn futures ended the overnight session well off session highs, leading to calls for a mixed start to open-outcry trade.

  • Corn futures ended the overnight steady to 3 1/2 cents higher following yesterday's limit gains. Today's limit is expanded to 60 cents.
  • While new-crop futures have moved off earlier highs, traders acknowledge corn planting is off to a very slow start.
  • USDA reports just 5% of the nation's corn crop was planted by Sunday -- the slowest since 1984. And virtually none of the crop in the "big-I" states has been planted, which is beginning to raise concerns given the wet and cold forecast.
  • Gulf corn basis has softened by 3 cents for immediate delivery and it is steady to 2 cents lower for spring and early summer delivery.

 

Soybean futures are called to open 4 to 8 cents higher on followthrough from yesterday's gains.

  • Soybean futures ended the overnight session mostly 3 to 6 cents higher, with the exception being a 10-cent gain in May futures.
  • Most soybean contracts ended the overnight session mid-range but still added to yesterday's strong gains.
  • Soybean futures outpaced gains in the corn pit overnight despite ongoing corn planting delays that raise the risk of acres being shifted to soybeans. This signals price action overnight was related to spread evening.
  • Traders' focus today will also be on evening positions as they close their books for the month.
  • Following yesterday's surge, Gulf soybean basis has softened by 3 cents for immediate delivery and by a dime for early May shipment.

 

Wheat futures are expected to open 5 to 8 cents lower on profit-taking.

  • Chicago wheat futures ended the overnight session 5 to 8 cents lower, with Kansas City down 2 to 7 cents and Minneapolis 4 to 5 cents lower.
  • Futures are seeing profit-taking following yesterday's gains, signaling $7.20 is tough resistance for July Chicago wheat.
  • Meanwhile, our weighted Crop Condition Index reveals the condition of the HRW wheat crop declined sharply again last week, while the SRW wheat crop held virtually steady.
  • Crop scouts with the Wheat Quality Council's tour of the HRW Wheat Belt will begin taking samples today. Disappointing results (likely) could help firm the market.
  • However, demand concerns are limiting buying interest.

 

Live cattle futures are called to open mixed as traders wait for packers to begin bidding for cash cattle.

  • Live cattle futures are called to open mixed on a continuation of yesterday's choppy tone.
  • But followthrough pressure for nearby futures will be limited by a decent start to the boxed beef market for the week.
  • Choice beef values surged $1.90 yesterday and Select rose $1.79, but the higher prices slowed movement to just 134 loads.
  • This week's cattle showlist is down slightly from last week, which will give feedlots more bargaining power in cash negotiations.
  • Following yesterday's sharp losses, feeder cattle futures are due for a corrective bounce, but upside potential will be limited if corn futures strengthen.

 

Lean hog futures are called to open higher on strength in the pork market.

  • Lean hog futures favored a weaker tone in mixed trade yesterday and more of the same is expected today.
  • Upside potential will be limited as nearby futures are trading at a sharp premium to the cash index.
  • But pressure on futures will be limited by tightening supplies and solid demand for cash hogs. The cash hog market is called steady to $1 higher.
  • Meanwhile, pork cutout values were just 14 cents firmer yesterday and movement slowed to 287.1 loads. Traders will keep an eye on the pork market for signs of demand.
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