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

March 24, 2014 05:11 AM

Corn futures have mildly extended early gains to trade 3 to 5 cents higher with old-crop contracts leading to the upside.

  • Traders are again building some fear premium into prices as tensions in the Black Sea region are heightening. Russia has upped its presence in Ukraine and the West is working to strengthen its response to the situation.
  • Traders believe the unrest will eventually shift some grain export business to the U.S.
  • The market has also easily brushed off news China has rejected a 21,800-MT of U.S. corn because it contained the unapproved MIR 162 strain (Syngenta's Viptera), as the tonnage was small and the situation is known.
  • Meanwhile, Taiwan's tender for up to 60,000 MT of corn sourced from the U.S. or South America reminds that importers still find U.S. prices attractive.
  • This morning's export inspections data will provide another read on the demand front.
  • Gulf basis slipped a penny for immediate delivery this morning, while other months were steady to a penny higher.
  • The forecast for continued cold weather and more snow in the Corn Belt today keeps thoughts of a late spring fresh.


Soybean futures are narrowly mixed this morning.

  • Futures are mildly favoring the upside as traders return from the weekend with an eye toward position evening. Action was highly volatile overnight. Support stems from ideas the downside may have been overdone late last week.
  • While demand for U.S. soybeans has remained strong longer than anticipated, weak economic data out of China raises concern this could change. Plus, concerns about negative crushing margins and bird flu slowing soy demand remain close at hand.
  • The weekly export inspections report will provide another signal as to demand strength today.
  • On the other hand, tight old-crop supplies are keeping the front-month above the psychological $14.00 mark. The contract found bargain buying on an early dip through this level.
  • Gulf soybean basis surged 5 to 8 cents for March through June delivery this morning, signaling some export demand news may lie ahead.


Wheat futures are the upside leader this morning with most contracts posting gains around 12 to 15 cents.

  • Tensions heated up in the Black Sea region over the weekend, again stirring ideas this will shift some grain export business to the United States.
  • Russia says it exported 19.786 MMT of grain from July 1 through March 19, a 40.8% increase over year-ago. Its ag ministry forecasts 2013-14 grain exports at 22 MMT, which compares to 15.69 MMT the previous season.
  • In addition, the market remains supported by drought conditions in the Central and Southern Plains. The forecast holds limited precip chances for the region.
  • Gulf wheat basis was mostly steady for HRW and SRW wheat this week.


Live cattle futures opened under pressure, but the market has since improved to trade mixed with nearby contracts slightly firmer and deferred months slightly lower. Feeder cattle futures gapped higher on the open and are enjoying slight solid gains.

  • Friday's Cattle on Feed Report favors market bears since it showed Placements well above expectations at 115% of year-ago levels. This suggests third quarter supplies will top expectations. On Feed and Marketings came in as expected.
  • However, pressure is being limited by the Cold Storage Report that showed frozen beef stocks at the end of February at 407.103 million lbs., which was down 5% from the month prior and 17% below year-ago.
  • However, signs a top may be near in the boxed beef market keep demand concerns in mind. Choice and Select boxed beef fell Friday and movement slowed to 104 loads.
  • The front-month contract is benefiting from the nearly $6 discount it holds to the low-end of last week's cash cattle trade at $150. Trade took place at $2 higher prices at all locations.
  • After a brief period in the black, packer margins have dipped back into the red.
  • Feeder cattle futures are benefiting from Friday's reminder of tight calf supplies.


Lean hog futures are posting sharp losses in all but far-deferred contracts, which are slightly lower.

  • Lean hog futures signaled a top may be in place last week. This is encouraging followthrough selling to start the week.
  • Most contracts are still overbought according to both the 9- and 14-day Relative Strength Index, signaling an additional pullback is warranted.
  • The market is also being pressured by Friday's Cold Storage Report that showed frozen pork stocks at the end of February up 6% from the month prior (though February is a shorter month) and 3% above year-ago.
  • This adds to concerns about retailer resistance to near-record high pork prices. Also fueling such concerns, a 37-cent rise in the pork cutout value slowed movement to 219.66 loads Friday.
  • On the other hand, the cash market remain strong. Packers are in need of supplies and are still enjoying profitable margins (though these have tightened notably), thus they are paying steady to $2 higher prices for cash hogs to start the week.
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