Ahead of the Open (VIP) -- February 13, 2014

February 13, 2014 02:18 AM

Corn futures are called 1 to 3 cents higher on impressive export sales.

  • Corn futures were lackluster overnight and ended the session marginally to 1 cent firmer.
  • Weekly corn sales of 1,269,800 MT for 2013-14 and 71,100 MT for 2014-15 came in above lofty expectations, with unknown destinations the lead buyer.
  • Weekly corn exports of 952,500 MT were up 28% from the previous week.
  • Strong weekly sales are encouraging as prices were stronger last week, which suggests corn has not yet priced itself out of the market yet.
  • Gulf corn basis is steady this morning for nearby delivery to stand 76 cents over March futures and is 1 cent higher for May delivery.


Soybean futures are called 2 to 5 cents higher on short-covering.

  • Soybean futures ended the overnight session 3 to 6 cents higher on short-covering on ideas yesterday's losses were overdone.
  • Sharp weakness in the U.S. dollar index is also supportive for the commodity markets this morning.
  • However, this morning's weekly export sales data is disappointing, which is tempering buying.
  • Sales of just 173,600 MT for 2013-14 and 122,600 MT for 2014-15 were a huge disappointment, although it occurred while China was celebrating its Lunar New Year.
  • But exports of 1.494 MMT were very strong.
  • The report shows China was a buyer of 320,700 MT of old-crop beans, with an unknown destination canceling 326,900 MT in sales.
  • Gulf soybean basis is 1 to 3 cents weaker for nearby delivery to reflect a softening of demand.


SRW wheat is called 2 to 3 cents higher on spillover from neighboring pits, with HRW and HRS called mixed.

  • SRW futures ended the overnight session mostly 2 to 3 cents higher, with nearby HRW and HRS futures firmer and the rest of the market mostly weaker.
  • A firmer tone in corn and soybean futures overnight lifted SRW futures, as did sharp weakness in the U.S. dollar index.
  • Weekly wheat sales of 597,000 MT for 2013-14 and 29,600 MT for 2014-15 were within expectations. Japan was the lead buyer.
  • Weekly exports of 403,700 MT were up 10% from the previous week.
  • Gulf HRW wheat basis is steady this morning, but Gulf SRW basis is 5 to 8 cents weaker for nearby delivery.


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

  • Live cattle futures are expected to be choppy this morning as traders wait on cash trade to develop.
  • It's been two weeks since the last active cash trade was established, which raises a high level of uncertainty toward packer demand this week.
  • Most expect $1 to $2 lower trade relative to the last established trade two weeks ago today or tomorrow, with feedlots passing of $141 bids yesterday.
  • Choice beef values fell $1.09 yesterday and Select declined 53 cents, but movement surged to 263 loads.
  • Feeder futures are also expected to be mixed this morning. March futures hold around a $1 discount to the cash index, which could bring some firmness back to the nearby contracts.


Lean hog futures are called slightly to moderately higher on improvement in the pork market.

  • Lean hog futures are expected to see a boost this morning from strength in the pork market.
  • Pork cutout values firmed $1.41 yesterday and movement was a very strong 501.41 loads.
  • Improvement in the pork market boosts packers' profit margins and is expected to result in steady to mostly $1 higher cash bids this morning.
  • But upside potential for nearbys will be limited ahead of the last trading day for February hogs tomorrow; the contract holds nearly a $2 premium to the index.
  • April lean hogs will soon become the lead-month contract and hold around a $9.60 premium to the cash index.
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