Market Snapshot, 10:00 am CT (VIP) -- April 9, 2014

April 9, 2014 05:13 AM
 

Corn futures are mixed with old-crop 1 to 3 cents higher and new-crop contracts posting 1- to 3-cent losses.

  • Traders are fully focused on evening positions for USDA's Supply & Demand Report to be released at 11:00 a.m. CT. Bull spreading action is lifting nearby contracts and pressuring deferreds, along with light profit-taking.
  • Traders expect USDA to cut 53 million bu. from its March carryover projection, lowering it to 1.403 billion bushels. They also expect USDA to trim its global corn stocks estimate by around 750,000 MT from last month. The market expects no major changes to USDA's South American corn production forecasts.
  • The forecast for a return of cold conditions and frost next week is limiting selling in new-crop futures.
  • Ethanol production declined 26,000 barrels per day (bpd) to 896,000 bpd the week ended April 4. But imports more than tripled to 38,000 bpd. As a result, ethanol stocks rose 532,000 barrels to 16.41 million barrels.

 

May and June soybean futures are posting gains in the teens while deferred contracts are roughly 6 to 9 cents higher.

  • Traders are actively bull spreading the soybean market ahead of USDA's S&D Report.
  • They expect USDA to confirm tight supplies with a 6-million-bu. reduction to its carryover estimate from last month, bringing it to 139 million bu.
  • Traders expect just minor changes to USDA's Argentine soybean production peg while they anticipate a 1-MMT reduction to its soybean crop peg for Brazil.
  • So far, the front-month contract has respected technical resistance at $15.00.
  • Expectations for another cold blast next week are limiting buying in new-crop beans. Any planting delays would help beans hold onto record planted acreage expectations.

 

Wheat futures are slightly lower this morning. SRW contracts are pacing losses, trading mostly 4 to 7 cents lower.

  • Traders are taking profits ahead of this morning's Supply & Demand Report from USDA. Traders expect USDA to increase its 2013-14 wheat carryover to rise by around 25 million bu. to 583 million bushels.
  • Pro Farmer's first weighted Crop Condition Index of the season shows the HRW crop down 64 points from last fall to 299, while the SRW crop declined 30 points to 348 (scale of 0 to 500 points, with 500 representing perfect).The HRW rating is still above year-ago at this point, while the SRW crop is below year-ago.
  • Rains are expected to again miss key winter wheat production areas this week.
  • Meanwhile, FranceAgriMer raised its 2013-14 soft wheat ending stocks forecast by 100,000 MT to 3.3 MMT due to lower exports within the EU.

 

Live cattle futures are mixed with spring- and summer-month contracts slightly higher and farther deferred months posting similar losses. Feeder cattle futures are slightly to moderately higher.

  • Nearby live cattle contracts are benefiting from the fact they are well below last week's cash cattle trade at $148 to $150.
  • While steady to lower cash prices are anticipated this week, futures have likely overdone it to the downside, as the front-month is more than $2 below early asking prices at $146.
  • Lower trade is anticipated due to recent declines in the product market, deeply negative cutting margins and slightly higher showlist estimates this week.
  • But the boxed beef market was mixed Tuesday. Choice beef values dropped 94 cents yesterday, while Select cuts firmed 98 cents. Movement improved to 167 loads, though this has yet to signals "strong" demand.
  • Feeder cattle futures saw some early profit-taking, but the market has since renewed its uptrend.

 

Lean hog futures have pared early losses and surged into positive territory, with most contracts sharply higher. The front-month contract is seeing light gains.

  • Lean hog futures saw sharp pressure yesterday and overnight, but short-covering has returned this morning.
  • Average hog weights in Iowa and Minnesota for the week ended April 5 hit a record-high 285.5 lbs., topping last week's record by 0.5 pounds. This is also an 8.3 lb. increase over year-ago.
  • The heavier hog weights are thought to be offsetting some of the impact of the porcine epidemic diarrhea virus (PEDV).
  • More ample supplies, lighter kill schedules and negative cutting margins for packers are keeping the cash hog market steady to lower.
  • The cash hog index has slid in recent days, but it remains more than $7 above the front-month contract, which expires Monday.
  • Adding support is a lighter decline in the pork cutout value yesterday, though movement remained on the light side.
     
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