Market Snapshot, 10:00 am CT (VIP) -- February 11, 2014

February 11, 2014 04:06 AM

Corn futures are near session lows with losses of 1 to 4 cents this morning.

  • Spillover from the soybean market encouraged some light profit-taking in the corn market early today. Corn has since taken over the role of downside leader as it took out near-term support levels.
  • Traders have paid little attention to yesterday's friendly Supply & Demand (S&D) Report in which USDA cut its corn carryover estimate by 150 million bushels, since supplies are still expected to be plentiful.
  • Brazil's crop-estimating agency, Conab, trimmed its corn crop estimate from 78.97 MMT to 75.47 MMT due to a smaller safrinha (second crop) estimate. But Conab's forecast remains well above other crop estimates. In yesterday's report, USDA pegged the Brazilian corn crop at 70.0 MMT.
  • Gulf basis slipped a penny for February and March delivery, but was steady to 2 cents higher for other delivery months.


Soybean futures have reversed course to trade mostly 2 to 7 cents higher. Nearby contracts are leading gains.

  • USDA's announcement that China purchased 116,000 MT of U.S. soybeans for 2014-15 delivery helped the market to trim early losses and move into positive territory.
  • Also reminding of strong demand for U.S. soybeans is steady to firmer Gulf basis levels this morning.
  • But improved rain chances for southern Brazil are limiting gains.
  • Conab trimmed its Brazilian soybean crop peg from 90.31 MMT to 90.01 MMT, but this still represents a large crop. Conab did note that hot, dry weather in southern Brazil could affect its estimates next month, however.
  • USDA yesterday raised its Brazilian soybean crop estimate to 90.0 MMT yesterday.


Wheat futures have softened to trade narrowly mixed in SRW contracts, while HRW and HRS wheat futures are mostly firmer.

  • Pressure on the corn market is translating to a lack of buying in SRW wheat futures.
  • But HRW contracts are benefiting from ongoing cold temps in the Plains and the possibility of further crop damage. However, much of the region benefits from protective snowcover and temps are expected to moderate soon.
  • Light support also stems from yesterday's steeper-than-expected cut to 2013-14 U.S. wheat carryover by USDA.
  • Countering this, however, is news the Australian Bureau of Agriculture Resource Economics and Sciences (ABARES) raised its 2013-14 Australian wheat crop peg from 26.213 MMT to 27.013 MMT due to strong production in Western Australia. This is above USDA's current peg of 26.5 MMT.
  • Gulf HRW basis is 1 to 2 cents weaker for nearby delivery, while SRW basis is steady this morning.


Live cattle futures are off to a mixed start with the February through June contracts moderately to sharply higher and deferred months mixed to mostly lower. Feeder cattle futures are moderately higher.

  • Showlist estimates are up in all locations after light cash cattle trade last week. This adds to ideas cash prices will decline again this week.
  • Nearby contracts are trading in line with last week's $140 to $142 cash cattle prices, limiting urgency to add either long or short positions until more is known about this week's cash prospects.
  • The boxed beef market has given some tentative signs it may be working on a low. Choice boxed beef values firmed 39 cents yesterday and Select dropped just 18 cents. However, movement was just 121 loads.
  • The recent plunge in the product market has pulled packer profit margins deep into the red.
  • Confirmation of abundant feed supplies yesterday (though lower than anticipated) is pressuring corn and lifting feeder cattle futures today.


Lean hog futures are steady to slightly lower in all but the far-deferred contracts.

  • Early cash hog bids are mostly steady as some plants are still buying for this week's kill, while movement is slow in parts of the Midwest due to cold temps.
  • Light pressure on the front-month contract stems from the $1.80 premium it maintains to the cash hog index with its expiration looming Friday. The soon-to-be front-month April contract is roughly $10 above the index.
  • Selling is being limited by a 37-cent gain in the pork cutout value yesterday, though movement slowed to 263.02 loads.
  • Traders remain hopeful that the product market will continue higher as Easter ham buying picks up and consumers shun record-high beef prices.
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