Market Snapshot, 1-:00 am CT (VIP) -- March 19, 2013

March 19, 2013 05:09 AM
 

Corn futures are 6 to 7 cents higher in the May and July contracts, while deferred contracts are mixed with a downside bias.

  • May and July corn futures are being supported by bull spreading amid tight old-crop supplies and spillover from the wheat market.
  • Technically, these contracts are improving, which is also triggering light chart-based buying interest.
  • Buying interest in new-crop corn futures remains limited as traders are anticipating a sharp rebound in production this year.

 

Soybean futures are steady to 3 cents higher through the August contract, while new-crop futures are around 4 cents lower.

  • Old-crop soybean futures have turned positive on support from wheat and corn. But buying interest is limited as traders sense the export demand window for U.S. soybeans is closing.
  • Reuters reports a a Chinese soybean buyer has canceled around 2 MMT of Brazilian soybeans due to shipping delays. But traders are waiting to see the firm turns to U.S. soybeans to fill near-term needs.
  • Gulf soybean basis is steady to 5 cents lower for nearby shipment, which signals demand for old-crop beans has softened.

 

Wheat futures are firming with nearby Minneapolis futures leading price gains.

  • Wheat futures have reversed course and are working higher on short-covering amid ideas the downside has been overdone. Nearby Minneapolis futures have moved to double-digit gains, with Chicago and Kansas City following closely behind.
  • Unless fresh demand news surfaces, however, the upside is limited to corrective trade. While demand for U.S. wheat has improved recently, the big tender needed to cement a short-term low is lacking.
  • HRW crop ratings modestly improved in the Southern Plains over the past week. But with the crop greening up, moisture requirements will rise and there's little rain in the near-term forecast.

 

Live cattle futures are mixed in early trade. Feeder cattle are under pressure.

  • Price action is light and choppy in the live cattle market, with a lack of active followthrough buying signaling traders remain hesitant toward the upside. Traders' bearish attitudes are also showing through in the discount the April contract holds to last week's cash trade.
  • Demand concerns continue to hang over the cattle market. Persistent cold weather is squelching any hopes for an early start to the grilling season.
  • While boxed beef prices remain strong, movement has been slow the past couple weeks, helping fuel the demand concerns.
  • This week's cattle showlist is up slightly from last week, which will make packers less willing to bid up for cash cattle, especially if boxed beef movement doesn't strengthen.
  • Given a lack of buying interest in live cattle, feeder cattle futures are under pressure, as that market remains technically very weak.

 

Lean hog futures opened with a slightly firmer tone, but quickly turned mixed.

  • Price action is light and choppy in the lean hog market this morning, with neither bulls nor bears interested in moving the market too much.
  • Summer-month futures are mildly favoring the upside, though the premium they hold to the cash market and ongoing demand concerns are limiting the upside to mild short-covering.
  • Cash hog bids are mostly steady in western locations, while steady to weaker bids are being reported in eastern areas. Packer demand is light across the Midwest as they try to further strengthen margins.
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