Market Snapshot, 10:00 am CT (VIP) -- February 24, 2014

February 24, 2014 04:08 AM

Corn futures are 1 to 5 cents lower with old-crop contracts leading to the downside.

  • After closing lower Friday, there's more profit-taking interest in the market this morning.
  • Weekend rains in dry areas of southern Brazil are pressuring the corn market to start the week. This could lead to increased safrinha corn plantings.
  • March corn is back below the $4.50 level, which has acted as both support and resistance in recent sessions.
  • Gulf basis is 3 and 1 cents higher for February and March delivery, respectively, possibly signaling demand news may be on the horizon.
  • Strength in the U.S. dollar index is also encouraging some mild profit-taking today.


Old-crop soybean futures continue to enjoy double-digit gains while new-crop is 5 to 9 cents higher.

  • The March soybean contract surged through resistance at the September high, triggering buy stops. Bulls are now targeting psychologically significant resistance at $14.00.
  • Traders are optimistic this morning's weekly export inspections report will reflect ongoing demand strength.
  • Logistic issues have delayed the active flow of Brazilian supplies to the market and active order cancellations by China.
  • Traders are brushing off rains across Brazil over the weekend and forecasts calling for more this week as these also slow harvest and shipping.
  • Gulf soybean basis firmed 2 cents for March and April delivery this morning; other delivery months held steady.


SRW wheat has improved to post slight gains in most contracts, while HRW and HRS wheat remain fractionally to 2 cents lower.

  • Traders are starting off the week with some light profit-taking in the HRW and HRS markets after recent gains.
  • But a return of cold temps and generally dry weather forecast for the Southern Plains keeps crop condition concerns close at hand.
  • Light support also stems from additional forecasts that this year's logistic problems in Canada will cause producers to reduce their wheat acreage next season.
  • These transportation issues have also lifted demand for U.S. wheat from countries like Japan. Traders are optimistic this will be reflected in the weekly export inspections update.


Live cattle futures are off to a mixed start.

  • Friday's Cattle on Feed Report came in on the bearish side of expectations, which is pressuring summer- and fall-month contracts. But the data also reflects ongoing supply tightening as feedlot inventories tightened compared to year-ago for the 17th straight month.
  • Also helping to limit selling is Friday's bullish Cold Storage Report that showed a larger-than-expected drop in frozen beef stocks last month. Beef stocks in frozen storage came in at 429.304 million lbs. as of Jan. 31, down around 10 million lbs. from the month prior and 55.3 million lbs. below year-ago.
  • However, a pullback in the boxed beef market is making some traders cautious. Choice boxed beef cuts slid 57 cents and Select fell 48 cents Friday. Movement also slowed to 130 loads.
  • The front-month contract is trading in line with the upper end of last week's $144 to $145 cash cattle trade in the Southern Plains. Nebraska saw trade at $146 to $148 last week. The April contract is well below the low end of these prices.
  • Feeder cattle futures are narrowly mixed amid some light position evening. The front-month contract is trading in line with the cash index.


Lean hog futures are off to a choppy start.

  • The April lean hog contract gapped higher on the open, propelled by the bullish technical posture of the market.
  • But generally speaking, bullish enthusiasm is being tempered by a Cold Storage Report that came in on the bearish side of pre-report expectations. Frozen pork stocks of 623.714 million lbs. as of Jan 31 were up 49.4 million lbs. from the month prior and 17.3 million lbs. above year-ago.
  • The larger-than-expected frozen pork supplies can likely be attributed to heavy hog weights.
  • Cash hog bids are steady to higher today as improving pork prices and still-positive packer profit margins are keeping demand strong. Winter weather slowed hog transportation last week.
  • Packer margins have eroded in recent sessions as many plants have been forced to pay up for supplies in recent weeks.
  • Pork cutout values firmed 17 cents on Friday, but movement was a light 229.15 loads.
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