Ahead of the Open (VIP) -- March 4, 2014

March 4, 2014 02:17 AM

Corn futures are called 3 to 5 cents lower amid profit-taking.

  • Corn futures ended the overnight session 3 to 5 cents lower following yesterday's highly volatile session.
  • May corn traded in the lower half of yesterday's trading range on light profit-taking. Importantly, the contract remained above support at last week's high.
  • Pressure this morning is being limited by concerns about political unrest in Ukraine, although traders are looking for concrete proof the situation will boost demand for U.S. corn.
  • Otherwise, there's little fresh news for the market to digest so key will be if funds return as active buyers this morning after buying an estimated net 20,000 contracts yesterday.


Soybean futures are called mixed amid bull spreading.

  • Nearby soybean futures ended the overnight session 1 to 4 cents higher, with new-crop futures marginally lower amid bull spreading.
  • Traders are reevaluating positions following yesterday's day of extreme price volatility. A higher start yesterday was met with profit-taking.
  • Therefore, key this morning is whether or not funds view still-strong technicals as enough encouragement to extend their long exposure to the market.
  • There's little fresh news for the market to digest this morning, although concerns linger about how long shipping delays in Brazil will last.


Wheat futures at all three exchanges are called 5 to 10 cents lower amid profit-taking.

  • All wheat flavors saw profit-taking overnight following yesterday's sharp gains.
  • But pressure was limited by ongoing concerns about the potential slowdown in trade from the Black Sea region, which is a major global hub for wheat trade.
  • Although already known, traders recognize the condition of the HRW wheat crop declined through February, as reported by state statisticians yesterday afternoon.
  • Traders are also awaiting results from Japan's tender for 111,779 MMT of U.S. and Canadian wheat to determine the competitiveness of U.S. prices.


Live cattle futures are called to open steady to weaker on profit-taking

  • Live cattle futures are vulnerable to profit-taking as traders wait on a better sense as to the direction of this week's cash market.
  • Pressure on futures should be limited to corrective trade given still-bullish technicals and ongoing strength in the beef market.
  • This week's showlist is thought to be smaller than last week, which gives feedlots bargaining power in this week's cash negotiations.
  • Choice beef values surged $3.79 yesterday and Select rose $4.69 on decent movement of 145 loads of product.
  • Traders are hesitant to extend long positions on ideas the market is nearing or has posted a major high, although fundamentals remain price supportive.
  • Slight weakness in the corn market should limit pressure in feeder futures to corrective selling.


Lean hog futures are called mixed amid position squaring.

  • Lean hog futures are expected to be mixed this morning amid spreading and corrective trade.
  • Key for bulls this morning is whether they view yesterday's setback as a buying opportunity given ongoing concerns about the porcine epidemic diarrhea virus (PEDV) and strength in the product market.
  • Pork cutout values improved $1.03 yesterday, but only 220.43 loads of cuts changed hands.
  • But improvement in pork values helps to keep packers' margins in the black, which is expected to result in steady to firmer cash hog bids this morning.
  • While technicals remain in bulls' favor, it's also important to note that increased price volatility at high prices is a sign the market is in the process of putting in a high.
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