Market Snapshot, 10:00 am CT (VIP) -- May 14, 2013

May 14, 2013 05:21 AM

Corn futures are mixed with a downside bias. Old-crop futures leading losses.

  • Corn traders are taking profits after Monday's sharp gains.
  • May corn futures expire at noon CT today. So far any fireworks expected with the expiration have been lacking.
  • Tight supplies and a strong cash market will continue to support old-crop futures. And July corn will have an upside target once May futures leave the board.
  • The record-slow corn planting pace at just 28% complete as of Sunday continues to limit selling interest in new-crop futures, but planters are finally actively rolling across the Corn Belt, so traders aren't showing great concern with the slow planting pace despite a wet forecast for late this week and early next week.
  • South Korea purchased 60,000 MT of optional origin (likely South American) corn.
  • A mildly firmer dollar today is limiting buying interest.


Soybean futures are 2 to 6 cents lower, except for the May contract which is trading around 18 cents higher.

  • May soybean futures are higher again this morning ahead of today's noon CT expiration. But unlike yesterday, this is not supporting deferred contracts.
  • Deferred soybean futures are slightly weaker as traders take profits after yesterday's gains.
  • Traders are shrugging off news that soybean planting was only 6% complete as of Sunday, the slowest pace since 1984. Traders are worrying again about a potential acreage shift from corn to beans given the historically slow corn planting pace, especially in the face of the near-term weather forecasts calling for precipitation across the Midwest late this week.
  • News the China National Grain and Oils Information Center (CNGOIC) says it expects that nation's soybean production to fall by 3.9% to 12.3 MMT on a decrease in seedings of 3.7%, is limiting selling interest. If achieved, it would mark the third straight annual decline and underlines the need for increased imports for the nation. It also sees soybean imports to rise to 5.6 MMT in May, up from 3.98 MMT in April.
  • The stronger dollar today is again raising concerns about its impact on exports.


Wheat futures are mostly 3 to 5 cents higher at Chicago and 2 to 3 cents higher in Kansas City and Minneapolis.

  • Light buying is being seen today in the face of a downturn in corn futures. But the buying interest is seen as mostly corrective in nature.
  • Weather continues to be negative for HRW growing conditions and supportive to Kansas City futures with forecasts calling for record high temperatures and continued dry conditions this week.
  • USDA's latest look at winter wheat crop conditions, as a whole, shows little change and our weighted Pro Farmer Crop Condition Index, reflects that. It shows the HRW crop moved up 1 point -- the first uptick since the growing season began last fall. That's giving traders some hope the crop is stabilizing. Still, the crop is "fair" to "poor."
  • USDA rates 41% of the Kansas winter wheat crop as "poor" to "very poor," up one percentage point from a week earlier. But this was expected.
  • The U.S. dollar index is modestly higher this morning. The rise in itself is not strong enough to put pressure on wheat futures, but the upward trend is limiting buying interest.
  • South Korea purchased 53,000 MT of optional origin feed wheat. Japan is seeking 147,620 MT of wheat in its weekly tender.


Live cattle futures are mixed while feeder cattle futures are slightly higher.

  • Cattle traders are anticipating a short-term top in boxed beef prices. Still, there are hopes for higher cash cattle prices after last week's downturn.
  • Summer-month live cattle futures contracts show a sharp discount to cash, reflecting traders' concerns with beef demand.
  • Until demand concerns ease, the upside is limited to corrective buying.
  • Feeder cattle are somewhat firmer in reaction to the downswing in corn futures.


Lean hog futures are mixed with June and August modestly higher and the July unchanged.

  • Trade activity is muted ahead of the expiration of the May contract at noon CT today. The May contract is at a slight premium to the cash index, while summer-month futures are trading at a slight discount to the cash market.
  • Cash hog bids are steady at most Midwest locations. Cash sources indicate some plants still need to fill late-week slaughter schedules but others have reduced kill hours. Saturday slaughter projections call for only 20,000 to 25,000 head.
  • The market is still absorbing the rise in the pork cutout value in Monday afternoon trade. It rose 60 cents to its highest level since Feb. 4. But movement dropped on the rise to just 255.6 loads. That suggests Memorial Day buying is complete and retailers are becoming more price-conscious.
  • A stronger dollar has some traders concerned about its potential negative impact on pork exports.
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