Market Snapshot, 10:00 a.m. CT (VIP) -- March 15, 2013

March 15, 2013 05:06 AM
 

Corn futures have softened slightly to trade 2 to 5 cents lower in most contracts.

  • Traders are booking profits in the corn market ahead of the weekend thanks to reminders that end-users are sourcing their needs with alternatives to U.S. corn.
  • Gulf corn basis for immediate delivery has softened 3 cents this morning to stand 68 cents above May futures, while basis is a penny stronger for April shipment. Gulf basis is steady to 2 cents lower for other shipment months.
  • Also, Allendale forecasts corn plantings of 96.956 million acres, reminding traders of prospects for a rebound in production for 2013-14. USDA most recently estimated planted acreage of 96.5 million.
  • The detection of high levels of aflatoxin in central European grain along with dollar weakness are helping to limit pressure.

 

Soybean futures have seen choppy trade this morning. Currently, old-crop beans are mixed while new-crop is slightly lower amid bull spreading.

  • Expectations South American bean supplies will soon hit the market continues to keep buyers away from old-crop beans. While ongoing port delays and an expected port strike next week could keep the U.S. export window longer, uncertainty about when it will close has encouraged risk aversion the latter half of the week.
  • Reports that soybeans at Brazil's Port of Paranagua moved to a discount to Chicago prices for the first time is raising expectations adds to such ideas.
  • In addition, Gulf basis levels have softened recently. This morning, it slid 10 cents for immediate delivery and 7 to 8 cents for April and May delivery.
  • But this export uncertainty is also limiting selling interest, as is news China purchased 165,000 MT of soybeans for 2013-14 today.
  • New-crop beans are being pressured by a reminder U.S. soybean production is expected to rebound this year. Allendale forecasts bean plantings of 78.324 million acres with an average yield of 43.35 bu. per acre for a 3.349 billion bu. crop.

 

Wheat futures are posting losses of 4 to 6 cents at all three locations.

  • Wheat futures are seeing some light profit-taking after the market posted gains yesterday. Spillover from corn is adding to the negative tone.
  • Allendale projects U.S. wheat plantings of 56.261 million acres with a trendline yield of 45.2 bu. per acre. This would result in a 2.204 billion bu. crop, which is down slightly from 2012-13's 2.269 billion all wheat crop.
  • Warmer weather in the Southern Plains is increasing the crop's need for moisture, which is limiting downside price risk. Just light rain is expected for Colorado and Kansas over the next five days, and the extended forecast calls for below-normal rain chances.
  • SovEcon raised its production forecast for Russia's grain crop to 84 MMT to 89 MMT, from its previous estimate of 80 MMT to 87 MMT.

 

Live cattle futures are posting moderate losses this morning. Feeder cattle futures are moderately to sharply lower.

  • Reports of very light cash cattle trade at $127 to $127.50 yesterday is weighing on the cattle market as most had been expecting trade to begin at steady to higher prices compared to the bulk of last week's trade at $128.
  • Pressure on cattle futures and a pullback in beef prices yesterday does add a bit of uncertainty to cash cattle expectations.
  • Boxed beef prices yesterday slipped $1.17 (Choice) and 87 cents (Select), and the softer prices failed to spur strong movement. Just 121 loads changed hands.
  • Feeder cattle futures are seeing spillover pressure from live cattle.

 

Lean hog futures are posting moderate losses this morning.

  • The pork cutout slid another 90 cents yesterday, signaling the product market has yet to put in a low. This also trimmed packer profit margins. Movement was impressive at 119.75 loads, however.
  • Thus, cash hog bids are steady to lower again today as packers are having no trouble securing market-ready supplies.
  • Livestock dealers say hog supplies currently surpass packer demand.
  • Pressure is being limited by sharp weakness in the U.S. dollar index and ideas spring grilling will soon give the pork market a lift.
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