Market Snapshot, 10:00 a.m. CT -- (VIP) -- February 7, 2014

February 7, 2014 03:58 AM
 

Corn futures are fractionally higher in most contracts this morning.

  • Corn futures are seeing light profit-taking to wrap up the week. Most contracts are working on mild gains for the week.
  • Traders are also reducing risk ahead of Monday's USDA Supply & Demand Report. Pre-report expectations are for USDA to lower its 2013-14 U.S. stockpiles estimate from January by 25 million bu. to 1.606 billion bu. -- still up substantially from 821 million bu. a year-ago.
  • A weaker U.S. dollar index is limiting pressure, as is confirmation U.S. corn demand remains strong.
  • Weekly export sales impressed yesterday and this morning USDA announced an unknown buyer purchased 141,200 MT of old-crop U.S. corn.
  • Gulf corn basis is steady to 1-cent higher this morning, signaling more demand news may be ahead.

Soybean futures are 2 to 3 cents higher this morning.

  • Traders are favoring the upside as they ready positions for the weekend and Monday's Supply & Demand Report.
  • Pre-report expectations are for USDA to peg U.S. 2013-14 soybean stockpiles at 143 million bu., which would be down 7 million bu. from its January peg and up 2 million bu. from year-ago.
  • A weaker tone in the U.S. dollar index is also supportive.
  • The market is also encouraged by yesterday's export sales report that showed China is still buying U.S. old-crop soybeans. The market had recently been pressured by ideas the nation will soon cancel some of its U.S. soybean orders due to the availability of South American supplies.
  • Gulf soybean basis is steady to 1 cent higher this morning to reflect tightening of supplies as a result of continued strong demand.

All three wheat flavors are posting gains of 2 to 4 cents this morning.

  • Encouraged by the much-improved chart posture of the market this week, traders are favoring the upside ahead of the weekend.
  • Weakness in the U.S. dollar index is also supportive as it increases the competitiveness of U.S. wheat prices on the global market.
  • While the market has benefited from recent reports of condition deterioration in winter wheat country, snowcover now protects the crop from ongoing cold temps.
  • However, drought remains entrenched across much of this area.
  • Shipping delays in Canada are also supportive for HRS futures.
  • Gulf SRW wheat basis is 1 cent firmer for May delivery and steady for other delivery months.

Live and feeder cattle futures are posting slight gains in most contracts.

  • Live cattle futures are favoring the upside as they wait for active cash cattle trade to begin.
  • Around 5,000 head changed hands in Nebraska yesterday at $141, which is down $5 from the bulk of sales in the region last week. However, the front-month is nearly $2 below such prices.
  • Despite tighter showlists and stressful weather, most expect cash cattle trade to take place below last week's $144 to $145 prices on the Southern Plains. Bids are at $138 in the region.
  • Packers are dealing with deeply negative cutting margins and the slide in the boxed beef market continues. Yesterday Choice values slipped $3.13 and Select dropped $4.32. Movement did improve to 156 loads. Movement has picked up on the price decline, though it has not yet reached levels spurring active demand.
  • A softer greenback on disappointing jobs data and lower corn prices are adding support to the feeder cattle market.

Lean hog futures are steady to slightly higher this morning.

  • Lean hog futures are benefiting from yet another day of steady to higher cash hog bids as bitter cold continues to make producers unwilling to market hogs. Cold temps are expected next week, too.
  • Ongoing improvement in the cash market means traders are not overly concerned with narrowing the premium the February contract holds to the cash hog index ahead of its expiration in a week.
  • Hog weights are also on the decline, though production remains well above year-ago levels.
  • Support also stems from improvement in the product market this week. The pork cutout value rose 14 cents yesterday, though movement slowed to 305.45 loads. Traders remain optimistic pork demand will strengthen as lofty beef prices are passed on to consumers.
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