Market Snapshot, 10:00 am CT (VIP) -- April 17, 2014

April 17, 2014 05:03 AM


Corn futures have faded to post fractional to 1 cent losses.

  • Traders are reducing risk exposure ahead of a long, holiday weekend.
  • May corn has struggled to find buying interest above the $5.00 level today. But traders have also been hesitant to push it much below this important level.
  • Selling is being limited by a Weekly Export Sales Report that signaled still-strong demand for U.S. corn. Sales of 601,900 MT for 2013-14 and 192,600 MT for 2014-15 met expectations. Export commitments for 2013-14 are running 164% ahead of year-ago, whereas USDA's projects exports will top year-ago by 139.4%.
  • Also signaling solid demand, USDA announced a 125,000 MT corn sale to South Korea for 2013-14.
  • But traders are more focused on the forecast for normal to above-normal temps to move into the Midwest next week.

Soybean futures remain split with old-crop down 4 to 5 cents and new-crop up 1 to 3 cents.

  • Traders are focused on bull spread unwinding ahead of the extended weekend.
  • This morning's Weekly Soybean Export Sales report came in near the top of pre-report expectations. As expected, old-crop sales slowed to 19,200 MT, and new-crop sales were solid at 400,700 MT for 2014-15.
  • Old-crop beans are seeing a bit of pressure from talk Chinese buyers may default on an additional 1.2 MMT of soybean shipments from the U.S. and Brazil as Chinese imports are struggling to obtain letters of credit due to poor crush margins and backlogged supplies.
  • But countering this is news that Argentine trucker and dockworkers have started an indefinite strike. Some exporters have reportedly canceled business through Saturday.

Wheat futures have extended early gains to trade double-digit higher in most contracts of all three flavors, with the HRW and HRS markets leading to the upside.

  • After pausing yesterday, traders are back to covering short positions and renewing the uptrend in the wheat market today.
  • Traders remain concerned about the condition of the HRW crop after a freeze event earlier in the week and another freeze in Kansas overnight. Ongoing drought in the region makes the crop even more vulnerable to freeze damage.
  • Adding support is this morning's weekly export sales report. Sales of 438,000 MT for 2013-14 and of 359,900 MT for 2014-15 topped expectations.
  • Strategie Grains has again raised its EU 2013-14 soft wheat export forecast by 1.2 MMT to 26.8 MMT to reflect the strong sales pace.

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

  • Reports of trade at $146 in Kansas today and late Wednesday in Texas are pressuring futures, as this is down $1 from week-ago.
  • While nearbys are already more than a dollar below these prices, traders are upping sales as this adds to ideas the cash market slide will continue.
  • Heavier showlist estimates and deeply negative cutting margins encouraged lower trade.
  • On the other hand, the boxed beef market has stabilized this week. Yesterday, Choice boxed beef rose 89 cents and Select firmed $1.33. Also notable, movement impressed at 209 loads.
  • Export demand for beef is also strong. Weekly export sales of 21,900 MT notched a marketing year high. Previous weeks also signaled strong demand.
  • Feeder cattle futures are facing heavy profit-taking to wrap up the week.

Lean hog futures have softened after a choppy start.

  • Cash hog bids are $1 to $2 lower to wrap up the week amid light demand. This week's and in some cases next week's kill schedule is reduced due to the Easter holiday and most plants have near-term needs secured.
  • But some contracts are benefiting from optimism the pork market may be stabilizing. Yesterday, the pork cutout value fell 70 cents, but movement surged to 513.94 loads. This signals prices may finally have hit value levels that could help the market put in a low.
  • The cash hog index has fallen notably this week, bringing it in line with May futures.
  • Weekly pork export sales more than doubled last week's puny tally, rising to 8,600 MT.
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