Market Snapshot, 10:00 am CT (VIP) -- March 25, 2013

March 25, 2013 05:09 AM
 

Corn futures have improved to trade 3 to 4 cents higher across the board.

  • Funds significantly expanded their long exposure to the market last week, and the market is seeing followthrough buying to start this week.
  • While the weekend snow event in the Midwest and Plains improves soil moisture prospects, it also rules out an early start to planting season.
  • Meanwhile, the market remains concerned about generally lackluster export demand. However, a 1-cent rise in basis for immediate delivery this morning signals tight supplies.
  • Strength in the U.S. dollar index is limiting buying interest in the commodity sector.

 

Soybean futures have improved to trade steady to 2 cents higher in old-crop contracts and roughly 3 to 6 cents higher in new-crop contracts.

  • Buying interest in old-crop futures is being limited by strength in the dollar index and pre-report positioning.
  • New-crop futures are benefiting from news China has purchased 234,000 MT of U.S. soybeans for 2013-14. The purchase signals China views U.S. soybeans as a "value."
  • Steady to firmer Gulf soybean basis for near-term delivery signals more demand news may be on the horizon, especially considering port congestion in Brazil.
  • Traders are also focused on readying positions for the Prospective Plantings Report Friday. Most expect planting intentions to be up slightly from year-ago.

 

Wheat futures have come off earlier lows, but are fractionally to 3 cents lower at all three locations.

  • Sharp gains in the U.S. dollar index adds to concerns that this will detract from the competitiveness of U.S. wheat on the global market. Traders will watch this morning's export inspections report to gauge demand strength.
  • Recent precip across the Plains with more in the forecast for weekend in winter wheat country is encouraging selling. There are also above-normal precip chances in the 6- to 10-day forecast.
  • This is overshadowing freeze warnings in the Southern Plains that could cause troubles for the jointing winter wheat crop.
  • Traders are also working to even positions ahead of Thursday's key stocks and acreage data.

 

Live cattle futures are enjoying slight gains in most contracts. Feeder cattle futures are slightly to moderately firmer.

  • Friday's Cattle on Feed Report came in on the friendly side of pre-report expectations for all categories, with Placements coming in at just 86% of year-ago levels. This reminder of tight supplies is especially supportive of deferred contracts.
  • Somewhat offsetting this was Friday's Cold Storage Report that showed beef stocks well above expectations, but up "just" 1% from last month.
  • Cash cattle trade last week took place at a disappointing $124 to $125, as the boxed beef market failed to impress.
  • On Friday, Choice boxed beef cuts fell $1.55 and Select values slid 96 cents. Only 140 loads changed hands. Recent snow is not favorable for an early start to the grilling season.
  • Feeder cattle futures are also receiving a boost from Friday's reminder of tightening feeder calf supplies.

 

Lean hog futures are steady to lower this morning.

  • Concerns heightened about pork demand last week. Traders will again pay close attention to the product market for signs it has finally put in a seasonal low again this week.
  • On Friday, the pork cutout value slid another 57 cents on movement of just 43.08 loads.
  • And while Friday's Cold Storage Report came in just below expectations, the 636.7 million lbs. in frozen storage at the end of February, was still an all-time high for that date.
  • While packers are enjoying wide cutting margins, they are paying steady to lower prices for cash hogs as most are bought ahead for this holiday-shortened week and there are ample supplies available.
     
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