Market Snapshot, 10:00 a.m. CT (VIP) -- April 1, 2013

April 1, 2013 05:03 AM
 

Old-crop corn futures softened with the open of pit trading to trade 40-plus cents lower (the limit is expanded today after a limit-lower close Thursday). New-crop futures are mostly around 5 to 6 cents lower.

  • Old-crop corn futures are facing followthrough profit-taking after USDA's Quarterly Grains Stocks Report Thursday signaled that either use has slowed more than documented or the 2012 corn crop was larger than USDA has indicated.
  • Thus, traders are working to find a price that attracts demand for old-crop corn.
  • Export sources report that Japan has priced more than 500,000 MT of corn and is seeking another 200,000 MT to take advantage of the recent price decline.
  • There is also talk that South Korea plans to buy 1.1 MMT of optional-origin corn.
  • Confirmation of fresh export business would help to rebuild a base of price support.

 

Old-crop soybean futures have softened slightly to trade double-digit lower. New-crop beans have seen choppy trade but most contracts are now 2 to 3 cents lower.

  • The heavier-than-anticipated soybean stocks USDA pointed to Thursday are weighing on old-crop soybean futures today. Spillover from corn is adding pressure.
  • New-crop beans, on the other hand, are holding up well in the face of spillover pressure as USDA pegged plantings at 77.1 million acres, which was below expectations and year-ago.
  • Traders are also hesitant to actively add short positions ahead of the Weekly Export Inspections Report this morning.

 

Wheat futures have softened slightly to trade mostly 8 to 12 cents lower in Chicago while Kansas City and Minneapolis are roughly 8 to 10 cents lower.

  • While wheat is facing spillover pressure from corn futures, the market isn't seeing as sharp of losses as traders are working to correct the spread between these markets.
  • Traders did a good job of anticipating Thursday's all wheat acreage projection, but the higher-than-expected wheat stocks estimate is limiting buying.
  • The forecast calls for significant rain in the Southern Plains this week and above-normal precip in the 6- to 10-day outlook.
  • Countering this, however, is talk that South Korean feed manufacturers plan to buy 450,000 MT of feed wheat for August to September arrival to take advantage of the recent price break.
  • Traders are also awaiting the first 2013 Crop Progress Report this afternoon. Going forward, the market will receive a weekly update on the condition of the winter wheat crop.

 

Live cattle futures are posting slight losses in all but far deferred contracts. Feeder cattle futures are gapped 1higher on the open and are sharply higher.

  • Live cattle futures are seeing light profit-taking after the market posted sharp gains Friday.
  • The lack of followthrough buying to start the week signals traders remain very concerned about lackluster beef demand and are not convinced a seasonal low is in place.
  • On Friday, Choice cuts slid 2 cents and Select values fell 46 cents; movement was also unimpressive at 147 loads.
  • But selling is being limited by last week's big jump in cash cattle prices. Trade took place at $127 to $129 Thursday, which compares to trade at $124 to $125 the week prior.
  • USDA's grain stocks report signals corn supplies are not as tight as thought, which is giving feeder cattle futures a big boost.

 

Lean hog futures are posting slight to moderate losses amid profit-taking this morning.

  • Thursday's Hogs & Pigs Report showed supplies expanding over year ago. While this expansion was anticipated, the number of hogs kept for marketing rose more than traders had anticipated.
  • On Thursday, the pork cutout value rose 32 cents on movement of 64.75 loads. On Friday, the pork cutout value rose 15 cents, but movement was very light at 20 loads.
  • Buying interest is also being limited by the $5-plus premium the April lean hog contract holds to the cash hog index.
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