Market Snapshot, 10:00 a.m. CT -- (VIP) -- February 13, 2014

February 13, 2014 04:01 AM

Corn futures are posting fractional to 1-cent gains this morning.

  • The corn market is favoring the upside thanks to weekly corn export sales of nearly 1.270 MMT for 2013-14 and 71,100 MT for 2014-15 for the week ended Feb. 6. The tally topped expectations.
  • For now, this eases concerns about the rise in corn prices slowing demand. Prices currently stand near to just above last week's levels.
  • But new-crop futures have dipped into negative territory at times due to recognition of ample supplies and expectations this will remain the case for some time.
  • 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.
  • Spillover from soybeans and a weaker U.S. dollar index are also supportive.

Soybean futures have surged to trade double-digit higher in old-crop contracts, with deferred months mostly 9 cents higher.

  • March soybeans briefly moved through tough resistance at $13.40 3/4 today. Whether the market is able to sustain buying above this level will be key to near-term price direction.
  • A weaker U.S. dollar index and ideas the downside was overdone yesterday are lifting soybean futures.
  • Also, traders are encouraged by the fact China was the lead buyer of old- and new-crop soybeans at 320,700 MT and 115,000 MT, respectively, in this morning's Weekly Export Sales Report. Old-crop sales of 173,600 MT and new-crop sales of 122,600 MT included a 326,900 MT decrease and fell short of expectations.
  • However, soybean exports of 1.494 MMT impressed. Also, soymeal and soyoil sales were strong for the week ended Feb. 6.
  • Traders are brushing off a 1- to 3-cent decline in Gulf basis for near-term delivery this morning.

SRW wheat futures are mostly 5 to 6 cents higher, while HRW wheat is up 1 to 3 cents and HRS wheat is posting gains of 3 to 5 cents.

  • A weaker U.S. dollar index and a friendlier tone in corn and soybeans are lifting wheat.
  • Traders are encouraged by weekly wheat sales of 597,000 MT for 2013-14 and 29,600 MT for 2014-15, which represents solid demand and matched expectations. Japan was the lead buyer.
  • Light support also stems from news Strategie Grains lowered its EU 2014-15 soft wheat production forecast by 0.3 MMT to 137.5 MMT. However, the firm also raised its export forecast for the grain by 1.2 MMT to 21.7 MMT.
  • Gains are being somewhat limited by the forecast for warmer, milder weather on the Plains.
  • Also, Gulf SRW basis is 5 to 8 cents weaker for nearby delivery this morning. Gulf HRW wheat basis is steady.

Live cattle futures have surged to trade moderately to sharply higher through the August contract, with deferreds slightly higher. Feeder cattle futures are moderately to sharply higher.

  • Cash cattle trade is expected to take place at $1 to $2 lower prices than $144 to $145 action two weeks ago, but futures had been hovering around last week's cash prices of $140 to $142. Thus, traders pushed futures higher this morning, and early gains triggered buy stops.
  • Bulls are also encouraged by a surge in boxed beef movement to 263 loads yesterday, which signals the boxed beef market may be working on a low. While beef prices dipped again yesterday, the pace of declines has moderated.
  • Showlist estimates are up this week and packers are cutting in the red. However, there is concern the winter storm event in the southeast could disrupt transportation.
  • Light support also stems from news weekly beef exports surged to 16,600 MT the week ended Feb. 6, more than doubling the prior week's tally.
  • Weakness in the corn market, spillover from live cattle and a weaker U.S. dollar index are lifting feeder cattle futures.

Lean hog futures are posting slight to moderate gains in most contracts.

  • Lean hog futures are benefiting from gains in the product and cash market. A weaker U.S. dollar index is also encouraging some short-covering.
  • Yesterday, the pork cutout value firmed $1.41 and, even more impressive, movement was very strong at 501.41 loads.
  • Early cash hog bids are mostly steady with some higher bids in the eastern Corn Belt due to the winter storm event. Plant closures along the East Coast could impact this week's kill.
  • But gains in the pork market have strengthened packer profit margins, giving them incentive to keep slaughter runs as full as possible in those plants unaffected by weather.
  • The cash hog index continues to rise, but gains in nearby futures have kept the February contract at a premium to the cash hog index ahead of its expiration tomorrow.
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