Market Snapshot, 10:00 am CT (VIP) -- March 25, 2014

March 25, 2014 05:07 AM

Corn futures have softened to post 1- to 3-cent losses, with old-crop leading to the downside.

  • Profit-taking is pressuring the corn market after yesterday's gains.
  • Spillover from the wheat market adds to the negative tone.
  • The market is also working to reduce some risk ahead of Monday's key USDA Prospective Plantings and Quarterly Grain Stocks Report.
  • Traders are also awaiting Informa Economics' latest acreage update to be released at 10:30 a.m. CT.
  • News Taiwan again passed on a tender for U.S. or South American corn raises some concern the rise in price is slowing demand.
  • The forecast for warmer conditions next week in the Corn Belt have eased concerns about the potential for spring planting delays for the time being.


Soybean futures have seen choppy trade this morning and are currently 1 to 3 cents higher.

  • Soybean futures have chopped on either side of unchanged this morning as some are engaging in followthrough buys while others are booking some profits.
  • While old-crop supplies remain tight and export demand for U.S. beans is still strong, traders believe the attention will soon shift to the 2014 season and expectations for record production.
  • Ideas Chinese bean demand may slow due to negative crush margins and bird flu remain close at hand.
  • Traffic has returned to normal at Argentina's Rosario port following dredging of the main waterway running to it.


Wheat futures are 1 to 4 cents lower in most contracts of all three flavors.

  • Strength in the U.S. dollar index is encouraging limited profit-taking in the wheat market after recent strong gains.
  • Meanwhile, the situation in Ukraine remains a source of underlying support as traders expect political tensions will eventually disrupt grain shipments. So far, the shipment pace has remained normal.
  • SovEcon has raised its 2014 Russian grain crop forecast by 2 MMT to 88 MMT. The firm expects Russian grain exports of 22 MMT in 2014-15.
  • Pressure is also being limited yesterday's reports on the condition of the HRW wheat crop, which showed conditions continue to deteriorate. The amount of wheat rated "poor" to "very poor" stands at 55% in Texas, 42% in Oklahoma and 21% in Kansas.


Live cattle futures are enjoying slight gains while feeder cattle futures are moderately higher.

  • Cattle futures are favoring the upside thanks to the discount nearby contracts hold to last week's cash cattle trade at $150 to $152. Early asking prices in the Southern Plains are at $152 -- up $2 from the bulk of trade in the region last week.
  • Feedlots feel higher prices are warranted by ongoing strength in the boxed beef market and tight showlist supplies. Choice boxed beef prices rose 96 cents and Select surged $2.27 to start the week. Movement was light at 111 loads, however.
  • Showlist estimates are up a net 2,000 head this week, but this is a marginal increase over last week's limited supplies.
  • Gains in the wholesale beef market helped lift packer profit margins back into the black.
  • Heavy losses in the hog market are keeping traders cautious toward the long side of the cattle market, however.
  • Softer corn prices are lifting the feeder cattle market this morning.


Lean hog futures gapped lower on the open and are posting sharp losses in most contracts.

  • Lean hog futures are seeing followthrough selling today as futures continue to pull back from the recent all-time highs. Contracts broke through or are testing uptrending support today.
  • The drop in the front-month contract along with the surge in the cash market have nearly aligned the April contract with the cash hog index. This could signal additional downside risk is limited for the market.
  • Packers are again paying steady to higher prices for market-ready hogs as some stockpiling in anticipation of shortages related to the porcine epidemic diarrhea virus (PEDV) are anticipated in the months ahead. Plus packers' profit margins are still slightly in the black.
  • RaboBank forecasts PEDV will cause a 6% to 7% decline in U.S. pork production this year. The situation is well known and is considered factored into prices.
  • Light pressure also stems from a 19-cent decline in the pork cutout value yesterday and light movement of 195.5 loads. This is the first sign retailers are starting to resist record-high pork prices.
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