Market Snapshot, 10:00 a.m. CT (VIP) -- Advice -- April 11, 2014

April 11, 2014 05:10 AM


Cotton producers: Increase old-crop cash sales… Old-crop cotton futures are signaling a top is in place and sharp near-term downside price pressure is possible. Therefore, hedgers are advised to finish 2013-crop sales by selling the final 25% of old-crop in the cash market. Cash-only marketers are advised to make a 15% sale to get to 90% sold on old-crop.

Technical action is still bullish for December cotton futures, so we'll wait on making additional new-crop sales for now. But be prepared to advance new-crop sales if technicals deteriorate.

Corn futures are narrowly mixed in early trade, with nearbys favoring the upside.

  • Corn futures continue to chop around the $5.00 mark as traders ready for the weekend.
  • The National Grain and Feed Association says Chinese rejections of U.S. corn shipments have totaled nearly 1.45 MMT, which is notably above the commonly reported 900,000 MT of rejections. The group says this has cost grain companies $427 million.
  • Otherwise, fresh news is lacking.
  • Traders continue to monitor the weather. The forecast calls for cold temps and even a freeze event to move into the Midwest and Plains this weekend. This keeps talk of planting delays alive.


Soybean futures are posting losses in the teens in the front two contracts; deferreds are down 6 to 10 cents.

  • Soybean futures have softened on profit-taking, but thus far the market has respected support at the bottom of the market's recent consolidated trading range.
  • The market remains pressured by more disappointing economic data out of China.
  • However, this morning USDA announced a 330,000-MT soybean sale to an unknown destination for 2014-15, which traders suspect is China.
  • Traders are also digesting news a Cargill soy processing plant in Illinois will halt deliveries of beans next week due a a railcar shortage.
  • Egypt bought a total of 230,000 MT of wheat today from Russia, Romania and Ukraine.


Wheat futures have rebounded to post gains around 2 to 3 cents in the SRW and HRW markets, while HRS wheat is 3 to 5 cents higher.

  • Wheat futures are enjoying some short-covering interest today after the SRW market found support at the 200-day moving average yesterday and today.
  • Also, temps near or in the 90s in the southern High Plains are stressing the winter wheat crop. This is expected to be followed by a major drop in temps, including some freezing temperatures this weekend.
  • Also, the Southern Plains are expected to miss out on much of the weekend precip.
  • The market is also benefiting from ideas the downside has been overdone this week.


Live cattle futures are slightly to moderately higher in most contracts. Feeder cattle futures are enjoying mild gains.

  • Nearbys are seeing some short-covering as traders wait for cash cattle trade to begin.
  • Most expect steady to lower trade relative to last week's $148 to $150 action, but futures are already well below these prices.
  • Lower cash expectations stem from heavier showlist estimates and deeply negative packer profit margins.
  • Plus, the boxed beef market has trended lower this week. Yesterday, Choice and Select beef values slipped 46 and 93 cents, respectively. But the price decline was again met by strong movement of 194 loads, signaling retailers see prices as a value.
  • Some bull spreading activity is pressuring deferred contracts.
  • Feeder cattle futures are seeing some short-covering. The technical pattern of the market favors market bulls.


Lean hog futures are mixed with a downside bias.

  • Lean hog futures are seeing some position evening ahead of the weekend. The market has seen highly volatile trade this week, adding to uncertainty about near-term cash direction.
  • A $1.84 decline in the pork cutout value yesterday and decent (but not impressive) movement of 323.38 loads adds to pressure on nearby contracts.
  • Recent declines in the product market have pulled packer profit margins into the red, limiting cash hog demand. Bids are mostly steady today with a few paying $1 lower prices.
  • The cash hog index has declined this week, but it remains at roughly a $3 premium to April futures, which expire Monday. The May contract is $8 below the cash index.
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