Market Snapshot, 10:00 am CT (VIP) -- April 16, 2014

April 16, 2014 05:02 AM
 

Corn futures are down 3 to 4 cents in most contracts.

  • Mild profit-taking is weighing on the corn market as traders look ahead to a three-day weekend.
  • Most contracts have thus far respected support at $5.00. This level has acted as both resistance and support in recent history.
  • Ukraine's 2013-14 grain exports reached 28.6 MMT as of April 16, according to the nation's ag ministry. The country plans to export 33 MMT by the end of the marketing year in June. This reminds that shipments are currently seeing little impact from political tensions in the region.
  • Selling is being limited by news ethanol production the week ended April 11 rose 43,000 barrels per day to 939,000 bpd. Ethanol stocks declined 455,000 barrels to 15.95 million barrels.
  • Light pressure stems from news Chinese growers plan to increase corn plantings by 1.75% this year, according to the nation's National Bureau of Statistics.

Soybean futures have pared overnight gains to trade 10 to 13 cents higher in old-crop contracts, while new-crop beans are roughly 5 to 6 cents higher.

  • Soybeans have seen some mild profit-taking after strong gains yesterday and overnight.
  • But bulls maintain control of the market.
  • May beans continue to respect support at $15.00 after surging through that resistance level yesterday.
  • Traders still have yesterday's impressive crush data in mind as this reflected even stronger-than-expected demand for tight 2013-14 soybean supplies. This has some thinking additional reductions to carryover may be warranted.
  • Buying in new-crop beans is a bit more restrained as production is expected to rebound this year.
  • But the fact that the old-crop/new-crop spread is near its high means new-crop beans will likely continue to tag along with any old-crop soybean rally.
  • Traders are brushing off disappointing Chinese GDP data today, as traders continue to believe that China will enact stimulus measures if the situation worsens.

Wheat futures have seen two-sided trade today. Currently, most contracts of all three flavors are favoring the upside in mixed trade.

  • The wheat market has seen some profit-taking after recent strong gains.
  • While recent freeze events remain in mind, traders will wait until they have a better picture of crop damage before returning as active buyers.
  • Meanwhile, export and sowings data out of the Black Sea region are overshadowing reports of escalating tensions in the area.
  • Ukraine's 2013-14 grain exports reached 28.6 MMT as of April 16, according to the nation's ag ministry, or roughly 86.7% of the nation's planned exports for the marketing year which ends in June.
  • Ukraine farmers have sown 2.58 million hectares of early spring grain as of today, which is 92% of the expected sowing area, according to the nation's ag ministry. This eases concerns regarding recent reports that up to 20% of Ukraine's land may not be planted this year due to political tensions.
  • Germany's farm cooperatives raised their 2014 wheat crop forecast marginally to 24.74 MMT, as recent rains have helped dry soils.

Live cattle futures got off to a narrowly mixed start, but the market has since firmed to post slight gains. Feeder cattle futures are also slightly higher.

  • Buying and selling interest is limited in the cattle complex as traders wait for cash cattle trade to begin.
  • Steady to lower trade is expected this week relative to last week's $147 action the Southern Plains and $150 trade in Nebraska. But traders already have this factored into futures prices.
  • Showlist estimates are up this week and packers are dealing with deeply negative margins. Plus, many plants have a holiday shortened kill schedule this week.
  • However, the boxed beef market has given some signs of stabilizing this week. Yesterday, Choice boxed beef firmed 34 cents and Select gained $1.09 and movement was solid at 181 loads.
  • Of note, this "value" buying is occurring at historically high prices of $222.86 per cwt. for Choice and at $213.14 per cwt. for Select.
  • Softer corn prices and gains in live cattle are lifting feeder cattle futures.

Lean hog futures are slightly to moderately lower this morning.

  • Weakness in the product and cash markets are weighing on lean hog futures today.
  • The pork cutout value plummeted $2.26 yesterday, but movement did improve to 347.48 loads. Bellies and ribs saw the heaviest declines.
  • This helped pull packer profit margins back into negative territory.
  • The cash hog market continued its slide today, with most plants paying $1 lower prices. Packers have adjusted kill hours to reduced supplies due to the porcine epidemic diarrhea virus (PEDV). Plus, most are well supplied on near-term needs.
  • In addition, USDA reports average hog weights in Iowa/Minnesota the week ended April 12 hit yet another record high of 285.7 lbs., topping last week's record by 0.2 pound. This is up 9.2 lbs. from year-ago.
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