Ahead of the Open (VIP) -- March 6, 2014

March 6, 2014 02:17 AM

Corn futures are called mixed in lackluster trade.

  • Corn futures ended the overnight session narrowly mixed, with nearbys steady to marginally higher and deferreds marginally to 2 cents lower.
  • Key this morning is whether corn futures take their cue from strength in the soybean market, with a weaker U.S. dollar index also providing a positive environment for buying.
  • This morning's Weekly Export Sales Report is also positive for market bulls, as it signals prices have not yet slowed demand. The report showed corn sales of 1.518 MMT for 2013-14 and 164,500 MT for 2014-15, which topped expectations. Mexico was the lead buyer of old-crop corn.
  • Weekly corn exports topped 1.1 MMT, with South Korea the lead destination.

Soybean futures are called 5 to 12 cents higher, with nearbys leading gains amid strong demand.

  • Soybean futures ended the overnight session 4 to 11 cents higher, with nearbys leading gains amid continued strong demand.
  • This morning's weekly export sales data is positive for old-crop futures, as it shows the window for U.S. exports remains open.
  • Weekly soybean sales of 772,700 MT for 2013-14 and 256,700 MT for 2014-15 topped expectations, with unknown destinations as the lead buyer.
  • Meanwhile, soybean exports of nearly 1.2 MMT were impressive, with China the lead destination.
  • Bulls' next objective for March beans is last week's high of $14.52, with the $14.00 level now support.


Wheat futures are called 1 to 3 cents lower amid light profit-taking.

  • All wheat flavors ended the overnight session around 1 to 3 cents lower amid light profit-taking.
  • But bulls still hold the near-term advantage in this market. Support for March SRW wheat is at the February high of $6.20 3/4.
  • News the Crimean parliament voted to enter the Russian Federation raises concerns that political tensions with Ukraine will rise. This raises concerns about trade in the region, although export sources say ships are being loaded normally.
  • Meanwhile, this morning's Weekly Export Sales Report is positive for the market, as it showed prices last week didn't slow demand. Wheat sales of 556,100 MT for 2013-14 and sales of 44,400 MT for 2014-15 topped expectations.
  • Weekly wheat exports of 633,100 MT were up 16% from the previous week, with Brazil the lead destination.


Live cattle futures are called to open steady to slightly lower on followthrough selling.

  • Live cattle futures showed light followthrough selling in electronic trade, which points to a weaker start to the day session.
  • Futures softened yesterday afternoon on news of cash cattle trade beginning at $148 in Kansas, which is down $2 from last week.
  • Despite tighter showlists this week, packers were unwilling to raise bids as margins are in the red.
  • But with April live cattle ending yesterday at around a $4 discount to the cash market, followthrough pressure this morning should be limited.
  • Meanwhile, the beef market continues to strengthen, with Choice values up $15.56 over the last week amid decent movement.


Lean hog futures are called to open firmer amid technical buying.

  • Lean hog futures saw followthrough buying in electronic trade, which signals there are still willing buyers in this severely overbought market.
  • Lean hog futures have surged amid concerns hog losses from the porcine epidemic diarrhea virus (PEDV) will escalate this spring and summer.
  • April lean hog futures ended yesterday at around an $10 premium to the cash index, which raises the risk of profit-taking in the near-term. June and July futures are trading at a $6 to $7 premium to the April contract.
  • Meanwhile, the cash hog market has strengthened this week amid tighter-than-expected supplies. Steady to firmer bids are expected again this morning.
  • Pork cutout values have firmed $8.00 over the last week to $107.83, which is helping to keep packers' margins in the black.


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