Market Snapshot, 10:00 am CT (VIP) -- March 8, 2013

March 8, 2013 04:10 AM
 

Corn futures are mostly 2 to 3 cents higher, with old-crop contracts leading gains.

  • Corn futures are seeing some light short-covering as traders await USDA's Supply & Demand Report. USDA is expected to peg carryover at 649 million bushels.
  • Gulf basis is a penny higher for immediate delivery this morning. That's more a function of tight supplies than fresh export business. Still, it's supportive for old-crop corn.
  • Recent heavy precip across the Corn Belt and expectations for a large crop is also limiting buying interest in new-crop corn futures.
  • Outside markets are price-negative as the dollar is sharply higher after non-farm payrolls came in much better than expected.

 

Old-crop soybean futures are fractionally to 3 cents higher. New-crop contracts are posting slight losses.

  • Traders are readying positions for today's Supply & Demand Report from USDA. Pre-report expectations are for USDA to lower carryover to 122 million bushels.
  • USDA is also expected to lower its Brazilian and Argentine crop estimates.
  • Chinese soybean imports slowed to 2.9 MMT in February, which was down 39.3% from January and 24.3% below year-ago. But shipping delays out of Brazil has caused Chinese crushers to rely on U.S. beans to fill near-term needs.
  • Recent improvement in soil moisture in the Midwest and expectations for a large crop is limiting buying interest in new-crop beans.

 

Wheat futures continue to favor the downside in light and choppy trade.

  • Traders are awaiting USDA's Supply & Demand Report, which is expected to show carryover up from month-ago at 713 million bu., based on the average pre-report guess.
  • Strong gains in the U.S. dollar are price-negative for wheat. While the recent price pressure would seemingly increase U.S. wheat's competitiveness on the global market, a rising dollar has countered much of the price drop.
  • Also, India is more actively selling wheat onto the world market. Yesterday India approved an additional 5 MMT of wheat exports.
  • Concerns with the HRW crop in the Central and Southern Plains have been brushed aside for now given recent heavy precip through the region.

 

Live cattle futures are favoring the downside in light trade.

  • Concerns with beef demand continue to shackle cattle futures. While boxed beef prices continued their charge higher yesterday, movement was again slow at 118 loads, signaling some resistance to higher prices.
  • A few additional cash cattle sales took place in Nebraska at $128 yesterday, which was steady with trade on the Southern Plains Wednesday.
  • With margins moving into the black for some packers this week, there's hopes of firmer cash cattle prices next week, but traders are content to take a wait-and-see approach.
  • Better-than-expected jobs data this morning is a potential positive for meat demand, although strong gains in the dollar are limiting buying interest in futures this morning.
  • Mild strength in the corn market and a lack of buying interest in live cattle is weighing on feeder cattle futures.

 

Lean hog futures are under light pressure this morning.

  • Yesterday's strong corrective gains failed to trigger followthrough buying this morning. This signals attitudes remain negative
  • Traders are waiting on strong signs of a low in the product market. While product movement has picked up, it has come amid lower prices. Traders are waiting for improved prices and movement to signal the product market has put in a low.
  • Cash hog bids are steady at most Midwest locations. Some scattered firmer bids are being reported in eastern locations, suggesting supplies are a little tighter than in western areas.
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