Market Snapshot, 10:00 a.m. CT (VIP) -- April 15, 2013

April 15, 2013 05:01 AM
 

Corn futures are roughly 7 to 14 cents lower with new-crop futures leading losses.

  • Heavy spillover from losses in crude oil and gold futures are weighing on the commodity sector after weaker-than-expected Chinese economic data raised macro-economic concerns this morning.
  • So far, traders are focusing on the positive effect of recent and expected precip for the Corn Belt on soil moisture.
  • Also, the 6- to 10-day and 8- to 14-day forecasts now calls for below-average precip chances for most of the Corn Belt. This is much more favorable for timely planting.
  • Pressure on old-crop corn is being limited by another penny improvement in Gulf basis for immediate delivery this morning, though basis for the latter half of April declined 1 cent. Recent basis strength signals tight supplies and possibly that export demand is improving.

 

Soybean futures have moved well off their lows to trade mixed in old-crop futures, while new-crop contracts are mostly 5 to 12 cents lower.

  • Old-crop futures have moved well off their lows amid ideas some bargain buying may be returning to the market, though basis slid 2 cents for immediate delivery this morning.
  • Improvement in soyoil futures is also providing light spillover support to old-crop futures.
  • Basis around the country remains historically strong, emphasizing tight supplies.
  • Selling interest is also being limited by ideas China will need even more beans going forward, as the country is expected to plant 8.5% fewer acres to beans this year.
  • Countering this, however, is slower-than-expected economic growth in China and the ongoing spread of bird flu, which could limit feed needs.

 

Wheat futures have softened to trade 20-plus cents lower in Chicago and Kansas City. Minneapolis is roughly 11 to 15 cents.

  • Broad risk aversion across the commodities is weighing on wheat futures this morning.
  • Traders are ignoring USDA's announcement China purchased 480,000 MT of SRW wheat for 2013-14, as this business is already factored into prices.
  • Profit-taking after Friday's high-range close is adding pressure.
  • But selling interest may taper later today as this afternoon's crop condition update will likely reflect some of the damage from last week's freeze event in major HRW production regions. Plus, more freezes are possible this week according to the near-term forecast.
  • Traders are ignoring a 10-cent surge in Gulf basis for April and May delivery today, which likely signals more demand news is ahead.

 

Live cattle futures are facing moderate pressure this morning. Feeder cattle futures are moderately to sharply lower.

  • Traders are engaging in some light profit-taking as they await showlist estimates and boxed beef action with which they will form initial cash cattle expectations.
  • On Friday, Choice cuts slid 63 cents and Select firmed 15 cents. Movement was very light at 125 loads.
  • The forecast for above-normal precip and below-normal temps this week raises concerns that the seasonal rally in beef demand could be further delayed.
  • General risk aversion on disappointing Chinese economic data is also limiting risk appetite to start the week.

 

Lean hog futures are posting moderate to sharp losses in early trade.

  • A general attitude of risk aversion across the commodity sector is weighing on lean hog futures this morning.
  • Plus, Friday's lackluster pork performance is pressuring the cash and futures markets.
  • The pork cutout value slid $1.57 on Friday and movement was relatively light at 340.2 loads.
  • This kept packer profit margins in the red and has encouraged some plants to reduce kill hours in an effort to improve margins as supplies are tightening. Today, cash hog bids are steady to lower amid limited demand to start the week.
  • The sharp premium nearby contracts hold to the cash hog index is adding light pressure.
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