Market Snapshot, 10:00 am CT (VIP) -- April 14, 2014

April 14, 2014 05:12 AM
 

Corn futures have extended early gains to trade 4 to 6 cents higher.

  • A cold snap in the Midwest along with some snow to start the week and the forecast for more cold weather at week's end is lifting the corn market to start the week.
  • This will delay fieldwork and is triggering some talk corn acreage may not expand as much as from March intentions as some are anticipating.
  • Increased tensions in the Black Sea region have renewed talk about the possibility of grain shipping disruptions.
  • SovEvon raised its 2013-14 grain export forecast and it upped its corn export forecast by 400,000 MT to 4.2 MMT.
  • French analyst Agritel lowered its 2014 corn production outlook by a combined 3.9 MMT for Russia and Ukraine to 33.1 MMT, citing growing tensions in the region and dry weather. This would be down 14.2% from 2014.
  • Gains in the soybean and wheat markets add spillover support.

 

Soybean futures are posting gains of mostly 4 to 10 cents, with old-crop leading to the upside.

  • Soybean futures are enjoying short-covering to start the week. A risk-on attitude across the commodity markets is lifting futures to start the week.
  • Tight old-crop stocks are lifting old-crop beans while new-crop are working to hold onto record-high planted acreage projections.
  • Traders are also reducing risk ahead of this morning's weekly export inspections update from USDA. Recent reports have signaled a slowdown in shipments, though the pace of exports remains above what is needed to meet USDA's export projection.

 

Wheat futures have surged 20-plus cents higher across all three flavors today, with HRW wheat leading to the upside with gains in the upper 20s.

  • Heightened tensions in the Black Sea region along with weather concerns in winter wheat country are lifting the market. There are also some concerns about slowed spring wheat planting.
  • Weekend rains missed the Southern Plains and cold temps have moved into the region. Freeze warnings are in effect as far south as the Texas Panhandle tonight and Tuesday.
  • Traders expect this afternoon's crop condition ratings from USDA to reflect continued deterioration.
  • Meanwhile, the Northern Plains are dealing with cold temps and snow.
  • Clashes in eastern Ukraine have raised concern that shipments of grain supplies from the region will be disrupted.
  • Agritel reportedly lowered its wheat crop forecast for Ukraine, Russia and Kazakhstan by nearly 4 MMT since February to 81.5 MMT. This would be down 9% from 2013.

 

Live cattle futures are mixed. Feeder cattle futures are slightly higher in the front-month contract while deferred months are under light pressure.

  • Cash cattle trade took place at $147 in the Southern Plains on Friday and at $148 to $150 in Nebraska. This was steady to $2 lower relative to the week prior but above nearby futures prices.
  • Packers continue to deal with deeply negative profit margins. Some plants may close their doors Friday in observance to Good Friday and to improve margins.
  • A $2.88 decline in Choice boxed beef and a $1.84 decline in Select values Friday drew margins deeper into the red. Beef movement of 150 loads was lackluster, but movement did improve for the week.
  • April live cattle are trading at around a $2 discount to last week's cash trade, which is limiting selling interest.
  • Feeder cattle futures are seeing some bull spreading activity, with nearby contracts lifted by the bullish chart posture of the market.

 

Lean hog futures are posting slight losses in the soon-to-expire front-month contract, while the June through October contracts are slightly to sharply higher.

  • The front-month April contract, which expires at noon CT today, could see some buying interest today as it is still roughly $2 below the cash hog index. April and June hogs have pushed out to strong gains amid the discount they hold to the cash market.
  • Packers are keeping cash hog bids steady to lower today as they are preparing for a holiday-shortened week and most are bought ahead.
  • The pork cutout value slid 3 cents Friday amid movement of 296.97 loads. Traders are waiting on signals the product market has found value.
  • Concerns with porcine epidemic diarrhea virus (PEDV) remain as underlying support, especially for summer-month contracts when market-ready supplies will be the tightest.
     
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