Market Snapshot, 10:00 am CT (VIP) -- February 3, 2014

February 3, 2014 04:05 AM

Corn futures are around 4 to 5 cents higher in most contracts this morning.

  • Corn futures are seeing some light followthrough buys after last week's high-range close. Spillover from the soybean and wheat markets add support.
  • Some contracts are also benefiting from technical buying as they are working on new highs for the year or are testing such highs.
  • Reminders of strong demand are also supportive this morning. USDA announced a 113,780-MT corn sale to unknown destinations for 2013-14 delivery.
  • Steady to higher Gulf basis this morning signals more such news may be ahead.
  • Traders are hopeful this morning's export inspections report will reflect yet another week of strong demand, as was the case in Thursday's export sales report.
  • The market is also being lifted by the forecast for more snow in the Midwest, which is expected to slow the transportation of corn to processing plants as well as the Gulf.


Soybean futures are posting double-digit gains in old-crop futures while new-crop is 3 to 7 cents higher.

  • A surge in the soymeal market are lifting soybeans to start the week. Tight supplies and logistic concerns are price-supportive.
  • The front-month contract is bumping up against psychologically significant $13.00 resistance mark.
  • Support also stems from news USDA announced a 40,000 MT soyoil sale to unknown destinations for 2013-14 delivery.
  • Traders are brushing off news Brazil has started shipping soybeans as a record-large crop and Chinese order cancellations have long been anticipated.
  • So far, however, China has not announced any large U.S. soybean order cancellations.
  • Traders are optimistic this morning's export inspections report will again reflect strong demand.


Wheat futures are roughly 3 to 6 cents higher in all three flavors this morning.

  • A weaker U.S. dollar index along with ideas the downside has been overdone in the wheat market of late are lifting wheat futures to start the week.
  • Traders are displaying a risk-on attitude toward grain futures, despite a definitive risk-off stance toward equities this morning.
  • Traders are also concerned about another cold blast in the Northern Plains this week, though snow has recently fallen and/or is expected to fall in the region.
  • Gains are being tempered by news Russia's government reports from July 1 through Jan. 26 it exported 17.327 MMT of grain, up 28.5% from the same period in 2012-13. The bulk of those exports has been wheat.
  • Gulf SRW wheat basis is steady this morning, but HRW basis is up 5 cents for immediate delivery to signal fresh demand may be surfacing.


Live cattle futures are moderately lower this morning after a gap-lower start for some contracts. Feeder cattle futures are also moderately lower.

  • Traders are reacting to cash cattle trade at $2 to $4 lower prices in the Plains late Friday at $145 to $146. Volume was light, which could lead to heavier showlists this week.
  • A slide in the boxed beef market last week along with heavier showlist estimates pressured the cash market last week.
  • Choice boxed beef values plunged $7.26 on Friday and Select fell $4.94. Movement was also very light at 91 loads.
  • The decline pulled packer profit margins back into the red. This could lead to lower trade again this week unless the wholesale beef market indicates it has put in a low.
  • Traders are also reacting to Friday's Cattle Inventory Report that confirmed the U.S. cattle herd is the smallest in 63 years. However, the beef heifer replacement figure came in below expectations, signaling herd rebuilding is a bit slower than expected.
  • Pressure is being limited by inclement weather in the Plains, as this could stress animals, amplifying supply tightness.
  • Strength in the corn market is adding to the negative tone in feeder cattle futures.


Lean hog futures are posting slight to moderate losses this morning.

  • A slide in the wholesale pork market along with spillover from live cattle are pressuring the lean hog market to start the week.
  • The pork cutout value fell $1.83 Friday and movement was light at 256.11 loads.
  • But countering this is steady to firmer cash hog bids as packers work to secure supplies ahead of yet another winter storm event.
  • The cash hog index continues to rise, though it remains at more than a $3.50 discount to the February contract.
  • But concerns that porcine epidemic diarrhea virus (PEDV) is still not under control raises concerns about supplies tightening even further into the summer months.
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