Market Snapshot, 10:00 am CT (VIP) -- April 7, 2014

April 7, 2014 05:15 AM
 

Corn futures remain under pressure this morning, with most contracts 2 to 3 cents lower.

  • Corn futures continue to chop around the key $5.00 mark, with most contracts using it as support.
  • But selling interest is being limited by expectations this morning's weekly export inspections report will show inspections in excess of 1 MMT.
  • Traders are also beginning to prepare for Wednesday's USDA Supply & Demand Report. Traders expect USDA to trim carryover as recent data has pointed to strong export demand.
  • A weaker U.S. dollar index is also helping to limit selling in the corn market.
  • The forecast for a late-week warm-up in the Midwest has also eased concerns about late planting for the time being.
  • Corn basis is steady to higher in the Midwest to start the week as farmers begin to ready for spring planting, slowing grain movement.

 

Soybean futures remain mixed with old-crop contracts 3 to 6 cents higher and new-crop slightly lower.

  • Bull spreading continues to lift old-crop futures and pressure deferred contracts.
  • Tight supplies continue to lift old-crop contracts, while expectations for record 2013-14 plantings are limiting buying interest in the new-crop beans.
  • Traders expect USDA to trim its 2013-14 carryover forecast in Wednesday's monthly Supply & Demand update.
  • Traders are brushing off news Brazilian beans arrived at the U.S. Gulf over the weekend, as this was largely expected. In fact, near-record soybean imports into the U.S. are expected for 2013-14.
  • Selling in new-crop contracts is being limited by USDA's announcement China purchased 120,000 MT of U.S. soybeans for 2014-15.

 

Wheat futures are choppy across all three flavors with nearby contracts favoring the downside.

  • Wheat futures are seeing some mild short-covering in some contracts after disappointing weekend rains on the Plains. However, more scattered rains are in the forecast, which also limits buying interest.
  • Traders are also readying for the first national crop condition ratings of the spring this afternoon. But crop deterioration has been well documented via weekly state condition updates.
  • Russia's ag ministry says the country exported more than 2 MMT of grain last month, including nearly 1.3 MMT of wheat.
  • Russia's grain union head says the country may increase its grain exports to 25 MMT in the 2014-15 marketing year, in part due to the addition of Crimea.

 

Live cattle futures got off to a firmer start, but the market has since softened to trade mixed. Feeder cattle futures are posting slight losses.

  • Live cattle futures initially enjoyed short-covering this morning as futures ended the week at wide discount to the cash market. But ideas a top is in place in the cash market has caused buying to fade.
  • Last week cash cattle trade took place at $148 to $150 in the Southern Plains, while trade took place at mostly $150 in Nebraska. This was down $2 to $4 from the bulk of trade the week prior.
  • April live cattle are around $5 below the low end of last week's cash trading range.
  • A steep decline in the boxed beef market Friday is also weighing on futures. The price break did encourage decent movement of 166 loads. However, this is still far from strong, signaling more downside potential for the beef market.
  • Feeder cattle futures are seeing mild profit-taking to start the week.

 

Lean hog futures are off to a choppy start, with most contracts favoring the upside.

  • Traders are evening positions to start the week after the lean hog market last week indicated a top is likely in place.
  • April lean hogs are being supported by the $7 discount the contract holds to the cash hog index.
  • The cash hog market is steady to $1 lower as packers have responded to supplies tightened by the porcine epidemic diarrhea virus (PEDV) by reducing kill hours.
  • On the other hand, a 92-cent uptick in the pork cutout value Friday is a positive, though movement failed to impress at 228.38.
  • Recent, sharp losses are encouraging mild short-covering in some contracts.
     
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