Market Snapshot, 10:00 am CT (VIP) -- April 8, 2014

April 8, 2014 05:16 AM

Corn futures have firmed with the start of daytime trading to post fractional to 3-cent gains in most contracts.

  • Early profit-taking has given way to renewed buying as traders are hesitant to push prices below the $5.00 mark for the time being.
  • Early pressure stemmed from news China has officially cleared the way for large-scale Brazilian corn imports. But this deal has been in the works for some time, limiting the impact of this "news."
  • Buying is being tempered by news the U.S. ag attaché in China expects the country to import 4 MMT of corn in 2013-14, 1 MMT lower than USDA's official forecast due to "biotech-related trade disruptions." But again, such shipping disruptions are well known..
  • Traders are evening positions ahead of tomorrow's Supply & Demand Report. Traders expect USDA to lower its corn carryover estimate to 1.403 billion bu., down 53 million bu. from last month.
  • Spot bids for corn are generally steady to firmer in the Midwest this week thanks to slow movement as farmers ready for spring. However, bids at elevators and ethanol plants are for the most part below the $5.00 level farmers are targeting.
  • The forecast for warmer temps as the week progresses has reduced concerns about fieldwork delays in the Midwest. But there are widespread frost chances for the Midwest early next week.


Soybean futures have reversed course to trade 3 to 7 cents higher in old-crop futures while new-crop are 2 to 3 cents higher.

  • Traders are back to bull spreading the soybean market. Sharp losses in the U.S. dollar index are also supportive.
  • The market is also readying for what is expected to be friendly USDA report data tomorrow. USDA is expected to lower its ending stocks estimate by 6 million bu. from last month to 139 million bushels.
  • The forecast for a return of cold temps next week is limiting buying interest in new-crop contracts, as extended corn planting delays would help beans hold onto expected record-high planted acreage.
  • Basis is mostly steady across the Midwest.


All three wheat flavors continue to post slight losses ranging from 2 to 5 cents, with winter wheat markets leading the decline.

  • Traders are taking advantage of yesterday's gains by booking some profits.
  • However, weakness in the U.S. dollar index and gains in the corn market mean this is the extent of selling interest for the time being.
  • Traders are brushing off ongoing HRW wheat crop declines as the market considers the impact of drought as factored into prices for the time being. Official data on this will be released this afternoon.
  • Similarly, traders are not concerned about the forecast for mostly dry and warm conditions the remainder of the week in the Plains.
  • Traders are also evening positions ahead of tomorrow's April Supply & Demand Report, which will incorporate the March 1 stocks data that came in larger than expected. As a result, traders look for 2013-14 wheat carryover to rise by around 25 million bu. to 583 million bushels.
  • Russian wheat exports rose to 1.5 MMT for the first two months of 2014, versus 331,000 MT during this period last year.
  • Russia's second largest grain trader is in negotiations to become a wheat supplier to Egypt's state grain buyer.


Live cattle futures got off to a mixed start, but the market has since softened to post slight losses in most contracts. Feeder cattle futures are slightly to moderately lower.

  • Nearby live cattle futures initially benefited from the wide discount they hold to last week's cash cattle trade at $148 to $150 in the Southern Plains. The front-month contract is $4 below the low end of this trade, with deferred futures holding an even larger discount.
  • However, early indications are that cash cattle trade will take place at lower prices again this week.
  • The boxed beef market continues to slide and showlist estimates are up this week. In addition, packer profit margins are deep in the red.
  • Light pressure on deferred contracts stems from news Australia and Japan reached a trade agreement that could shift some beef export business away from the U.S. if it does not also reach an agreement with Japan.
  • Traders are also discouraged by ongoing light wholesale beef movement despite a slide in beef prices. This could point to lackluster grilling demand.
  • Gains in the corn market are encouraging profit-taking in feeder cattle futures after the market edged out gains yesterday.


Lean hog futures are posting sharp losses in early trade with nearby contracts leading to the downside.

  • After an upside day of trade yesterday, hog futures are facing profit-taking pressure as traders continue to pull prices lower amid ideas the impact of the porcine epidemic diarrhea virus (PEDV) has been factored into prices -- perhaps more so than warranted -- and that a top is in place.
  • Meanwhile, the pork cutout value continues to slide, pulling packer profit margins into the red. Also of note, the price decline has failed to spur an uptick in movement that would signal prices have fallen "far enough."
  • Packers have also trimmed kill hours in an effort to improve margins and account for PEDV-diminished supplies. And negative margins have reduced demand. As a result, cash hog bids are $1 to $2 lower today.
  • Daily slaughter continues to track below year-ago levels.
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