Market Snapshot, 10:00 a.m. CT (VIP) -- March 20, 2013

March 20, 2013 05:04 AM
 

Corn futures have turned mostly lower as buying interest from earlier in the day continues to fade.

  • Corn futures are sliding as traders are now mildly taking profits out of the market and unwinding bull spreads.
  • A weakening of basis and increased farmer sales is weighing on old-crop futures given a lack of fresh bullish news this morning.
  • Gulf basis softened 3 cents for immediate delivery this morning but still stands 65 cents above May futures. Interior basis is also weaker as the old-crop price strength has triggered some farmer sales.
  • New-crop futures continue to struggle to find buying interest amid expectations there will be a strong rebound in production this year.

 

Old-crop soybean futures are now 1 to 3 cents higher, while new-crop contracts are 1 to 3 cents weaker.

  • Bull spreading continues to be seen in the soybean market this morning, but futures have faded from earlier levels.
  • Tight supplies and strong basis are supporting old-crop soybeans, although traders are reluctant to actively buy as the South American shipping season is expected to soon hit full stride even though major bottlenecks remain at Brazilian ports.
  • Gulf soybean basis is steady this morning to stand 65 cents above May futures for immediate delivery.
  • New-crop contracts are being pressured by expectations for a record crop this year, which would improve the supply situation in 2013-14.

 

Wheat futures are now mostly 2 to 5 cents higher, with Chicago and Kansas City contracts mildly outpacing Minneapolis futures.

  • Wheat futures are being supported by short-covering with the corrective buying coming primarily from weakness in the U.S. dollar.
  • May Chicago wheat futures are also being supported by long corn/short wheat spread unwinding as the contract has moved back in line with May corn.
  • A pickup in wheat demand is also supportive, as U.S. wheat futures are competitive on the global market. But a big purchase of U.S. wheat is needed to spark more than corrective buying interest.
  • Algeria bought 350,000 MT of optional origin wheat this morning, but the business is expected to go to France.

 

Live cattle futures are under light to moderate pressure. Feeder cattle futures are sharply lower.

  • Live cattle futures are seeing mild followthrough selling after Tuesday's price drop. April live cattle are trading in line with the top end of initial cash sales yesterday.
  • Light cash cattle sales got started at $124 to $125 in the Central and Southern Plains, although most feedlots are still holding out in hopes of better bids.
  • Demand concerns continue to hang over the market as retailers are showing resistance to high boxed beef prices. There are also concerns with export demand given recent strength in the U.S. dollar, though the dollar is weaker today.
  • Selling interest is being limited by expectations Friday's Cattle on Feed Report will be bullish as feedlot numbers are expected to continue to tighten.
  • Feeder cattle are being pressured by technical selling as futures gapped to new contract lows. Concerns about demand for cash feeder cattle amid high feed prices are also weighing on feeders.

 

Lean hog futures are moderately lower this morning.

  • Lean hog futures are being pressured by weakness in the cash and product markets, especially given the premium nearby contracts hold to the cash market.
  • The cash hog market is steady to weaker as packers are bought ahead on slaughter needs and are working to improve margins.
  • Demand concerns are also weighing on the market. While pork is cheaper than beef, cold temps are likely to delay the start of the grilling season and exports are a question mark.
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