Market Snapshot, 10:00 am CT (VIP) -- March 5, 2014

March 5, 2014 04:06 AM

Corn futures are trading mixed in old-crop contracts and mostly 1 to 3 cents lower in new-crop contracts.

  • Corn futures faced mild profit-taking overnight and early this morning.
  • However, the trend of the market clearly remains to the upside.
  • News that China may approve Viptera corn (MIR 162) the first half of the year is mildly supportive. However, there is plenty of skepticism that anything will decided "quickly."
  • Gulf corn basis firmed a penny for immediate delivery this morning, reminding of strong export demand for U.S. corn.
  • Tomorrow's Weekly Export Sales Report will provide an update on this front.
  • Ethanol production the week ended Feb. 28 declined 11,000 barrels per day (bpd) to 894,000 bpd. Ethanol stocks declined 413,000 barrels to 16.61 million barrels, however.


Soybean futures are 3 to 9 cents lower this morning.

  • Soybean futures are facing some light profit-taking this morning. However, nearby contracts have clearly established the $14.00 area as support.
  • Light pressure stems from USDA's announcement that China canceled 245,000 MT of old-crop U.S. bean orders. But as this was a relatively small tally and cancellation have been expected for a long time, the market's reaction is relatively subdued.
  • Plus, traders continue to point to lower crop estimates out of Brazil due to drought in some areas and quality-compromising late-season rains in some areas. Bulls hope this means Chinese cancellations may be lighter than anticipated, pointing to higher U.S. exports.
  • Gulf soybean basis is a penny higher for August delivery and steady for other months.


SRW wheat futures are 1 to 6 cents lower. HRW futures are mixed. HRS futures are fractionally to 1 cent lower.

  • Spillover from corn and beans is encouraging profit-taking in wheat today.
  • Also, precip in the forecast for the Southern Plains is seen as aiding drought conditions in the area. Traders are brushing off the fact that some of this is expected to fall as snow and sleet.
  • Ukraine's ag minister said overseas trading houses have not yet resumed the completion of new grain export contracts due to continued concerns about tensions between Ukraine and Russia.
  • The European Commission today projected the EU's wheat production will hold steady in 2014-15 relative to the current marketing year as an increase in acreage will likely offset lower yields.


Live cattle futures gapped higher on the open but early gains led to some profit-taking and the market is now mixed with teh most actively traded contracts under pressure. Feeder cattle futures are also mixed.

  • Expectations for at least steady cash cattle trade initially lifted live cattle this morning. April live cattle remain at a $4 discount to last week's $150 trade in the Southern Plains, which means there is significant upside potential for the contract.
  • Early asking prices are around $153 to $154 in the Southern Plains.
  • However, early gains have triggered some mild profit-taking.
  • The boxed beef market continued its surge yesterday with Choice and Select cuts up $2.64 and $1.93, respectively. The price rally has slowed movement, however. Just 117 loads changed hands yesterday.
  • Besides beef price strength, market bulls are also eying tighter showlist estimates this week as this could increase feedlots' bargaining power.
  • On the other hand, packers continue to deal with negative cutting margins, though these have improved notably.


Lean hog futures traded sharply to limit higher this morning after another gap-higher start, but this has since given way to intra-session profit-taking and choppy trade.

  • Lean hog futures have seen volatile trade in early trading. The market initially enjoyed strong followthrough buys after yesterday's limit- to near-limit higher move that was followed with strong followthrough buys overnight. But profit-taking ensued.
  • The market is severely overbought, signaling a time or price correction is overdue.
  • Traders remain concerned about the impact of the porcine epidemic diarrhea virus (PEDV), especially looking ahead to the spring and summer months when supplies are historically tight. This is lifting summer-month contracts.
  • Also supportive is the ongoing rally in the pork market. Yesterday, the pork cutout value rose $1.54 and movement improved to 365.99 loads.
  • Strength in the product market and tightening supplies has forced packers to raise bids again this week. The cash hog index is within a nickel of the $99.00 mark.
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