Market Snapshot, 10:00 a.m. (VIP) -- March 18, 2014

March 18, 2014 04:56 AM

Corn futures are enjoying gains of 2 to 4 cents this morning.

  • Corn futures are enjoying mild short-covering today. Spillover from the soybean and wheat markets adds to the positive tone.
  • Corn traders continue to watch for signs that trade out of the Black Sea region could be disrupted in the near-term by Ukraine-Russia political tensions. Political tensions in Ukraine appear to be heating up again, which is lifting the grain and oilseed complex.
  • Underpinning the corn market's view of the Ukrainian situation is speculation that a lack of financing for spring crop plantings could sharply reduce corn production in the country, likely increasing 2014-15 U.S. corn demand.
  • News South Korea bought corn from the U.S. also reminds of much-improved demand.
  • Gulf basis slipped 2 cents for immediate delivery, but other delivery months were steady to a penny higher.
  • A few traders are also looking ahead to spring planting with some concern. The forecast for continued cold weather does not bode well for thawing frozen soils or a prompt start to fieldwork or planting.


Old-crop soybean futures are posting double-digit gains, with the May contract up 25 cents. New-crop futures are mostly 7 to 9 cents higher.

  • Soybean futures are enjoying strong followthrough buying this morning. The move through $14.00 in the front-month triggered buy stops. July soybeans are within pennies of that key resistance area.
  • News China's ministry of commerce upped its March soybean import forecast from 3.49 MMT to 5.25 MMT is supportive, as it eases recent talk that bird flu, negative crushing margins and poor economic data may ease the nation's demand for soy products.
  • Traders are also pointing to yesterday's NOPA crush report that came in slightly stronger than expected as evidence of solid domestic demand.
  • Many traders continue to watch for cancellations of U.S. soybean buys by China. However, China seems to be more focused on canceling South American origin soybeans at this time as Chinese importers negotiate with ship brokers to restructure freight deals.
  • Gulf basis jumped 4 cents for immediate delivery and a penny for April this morning, possibly signaling more demand news lies ahead.


Wheat futures have extended overnight gains to trade 10 to 13 cents higher in most contracts of all three flavors. HRW wheat is leading to the upside.

  • Ongoing uncertainty about the impact of Crimea's secession from Ukraine and tensions in the region is giving traders some incentive to build premium back into the market. While grain shipments have not yet been disrupted, this could change.
  • In anticipation of reduced competition from Ukraine, Russia's SovEcon raised its grain export forecast from 23.1 MMT to a range of 24.0 MMT to 24.4 MMT.
  • Meanwhile, there is also talk that Ukraine's spring grain sowing will be down in 2014 due to devaluation's of Ukraine's currency and tightening credit lines.
  • In addition, state crop reports indicate ongoing deterioration in U.S. winter wheat country, with some states reporting notable declines. In Texas, the amount of wheat rated "poor" to "very poor" jumped to 52% the week ended March 16 versus 31% the previous week.


Live cattle futures are off to a split start with April through October futures slightly higher and deferred months posting similar losses. Feeder cattle futures are slightly to moderately lower.

  • Traders are tentatively favoring the upside amid some bull spreading activity.
  • Nearby contracts remain at a discount to last week's cash trade that ranged from $148 to $152, with the bulk of trade on the Southern Plains taking place near the lower end of that range.
  • This week, trade is not expected to get underway until the latter half of the week. Early asking prices are at $151 to $152 in Texas, as feedlots point to tighter showlist estimates and record-high Choice boxed beef prices. Also, packers are enjoying profitable margins.
  • Choice values surged another $2.41 yesterday, but Select fell 44 cents and movement waned to 86 loads. This keeps concerns the market is working to put in a top nearby.
  • Gains in the corn market are encouraging some profit-taking in feeder cattle futures.


Lean hog futures are posting moderate to sharp gains through the August contract, while the October contract is sharply lower.

  • Lean hog futures are enjoying strong followthrough buys today after the market surged to start the week. Futures are again notching contract highs.
  • While the hog market remains technically overbought and at a steep premium to the cash index, traders are unwilling to be caught short the market. Momentum clearly remains with market bulls.
  • The pork market continued its record-setting climb yesterday; the pork cutout value surged $2.42 yesterday thanks to strong gains in all cuts except hams and bellies. However, movement slowed to 216.56 loads.
  • This along with ideas market-ready hog supplies will tighten in the weeks ahead have kept cash prices steady to higher in recent weeks. Packers are again paying steady to higher cash prices today.
  • Tight supply outlooks can be attributed to the porcine epidemic diarrhea virus (PEDV). Reduced supplies due to the virus have resulted in at least one plant reducing its hours of operation.
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