Market Snapshot, 10:00 am CT (VIP) -- March 17, 2014

March 17, 2014 05:11 AM

Corn futures have pared early losses to trade 2 to 3 cents lower.

  • Favorable outside markets have helped the corn market to pare losses. Soybeans' upside reversal is adding support.
  • Pressure stems from a sell-the-fact reaction to news Crimea voted to secede from Ukraine and join Russia. This was widely expected, tempering any bullish reaction.
  • Traders will continue to closely monitor the situation to see if sanctions or political tensions disrupt Ukraine's grain exports. Thus far, this has not been the case.
  • Also helping the market to trim gains was USDA's announcement Mexico bought 107,400 MT of U.S. old-crop corn this morning.
  • USDA released its export inspections data early. Inspections of 976,742 MT the week ended March 13 topped expectations and the week prior. USDA's tally for the week ended March 6 was also revised slightly higher.
  • Gulf basis ticked 2 cents higher for immediate delivery this morning, possibly signaling more demand news is ahead.


Soybean futures have reversed course to post 4- to 7-cent gains in old-crop contracts. New-crop futures are narrowly mixed.

  • Early losses in the soybean market have given way to bargain buying.
  • Nearby contracts are leading gains amid some bull spreading activity.
  • The market was encouraged by USDA's announcement of a 110,000 MT U.S. soybean meal sale to an unknown destination for 2014-15 delivery.
  • Also, USDA's soybean export inspections of 939,738 MT the week ended March 13 came in at the top of pre-report expectations.
  • NOPA crush data for February will be out at 11 a.m. CT. The average pre-report trade guess puts February soybean crush at 140.9 million bushels.
  • Outside markets are also supportive, with the U.S. dollar index under pressure and the stock market posting strong gains.


Wheat futures continue to post losses around 5 to 6 cents in the SRW wheat market, while HRW and HRS wheat are posting lighter losses.

  • Ideas the upside was overdone preceding the weekend vote in which Crimea's people overwhelming supported leaving Ukraine and joining Russia is pressuring wheat futures today.
  • While Ukraine is the world's No. 5 wheat exporter, shipments thus far have been uninterrupted and the Crimea region is not a major contributor to the nation's grain crop.
  • Export inspections the week ended March 13 (released early) of 496,396 MT were up from the week prior and within pre-report expectations.
  • The overall tally fails to reflect a major uptick in demand traders had hoped might stem from unrest in Ukraine and shipping disruptions in Canada.


Live cattle futures are mixed with April and June futures higher and deferred contracts slightly lower. Feeder cattle are also narrowly mixed.

  • Traders are engaging in some mild positioning to start the week, with nearby contracts lifted by the discount they hold to last week's mostly $148 trade in the Southern Plains and $150 to $152 cash cattle trade in Nebraska.
  • These cash prices were steady to higher relative to the week before, which eased concerns the cash market had put in a top, despite bullish fundamentals.
  • The boxed beef market rallied to new all-time highs last week, finally pulling packer profit margins into the black. However, prices slid the latter half of the week and movement slowed. This signals the product market may have put in a top.
  • Traders will await showlist estimates before forming strong cash opinions for this week.
  • Feeder cattle futures are mixed as traders weigh profit-taking against negative corn prices.


Lean hog futures gapped higher on the open and nearby contracts are enjoying sharp gains in excess of $2.00. Far-deferred months are slightly higher.

  • April lean hogs triggered buy stops on their surge through psychological resistance at $120.00 and $121.00 this morning.
  • Support stems from renewed concerns about the porcine epidemic diarrhea virus (PEDV). Due to the disease, Smithfield Foods has halted Friday kills at its Tar Heel, North Carolina, plant. Reuters cites cash sources as saying other plants owned by Hormel Foods Corp., JBS Swift and Triumph Foods may trim hours soon.
  • Also supportive, packers are again paying steady to $2 higher cash prices as strong margins give them incentive to process hogs but supplies are tight.
  • Surging pork prices have kept packer margins well in the black. On Friday, the pork cutout value surged $2.98, but movement slowed to 212.88 loads. Of note, bellies surged $9.38.
  • Traders expect pork prices to remain elevated thanks to record-high boxed beef prices. Even at a record high of $123.60 per cwt., the pork cutout value is still a relative bargain.
  • However, with the market heavily overbought and nearby futures well above the cash market, profit-taking could take hold at any time.
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