Market Snapshot, 8:30 am CT (VIP) -- April 2, 2013

April 2, 2013 03:39 AM
 

Corn futures are 3 to 8 cents higher on short-covering.

  • Following a two-day 90-plus cent decline, May corn futures are firmer this morning as traders cover short positions.
  • The market is also responding to indications Asian feed buyers are increasing their purchases. South Korean buyers purchased at least 130,000 MT of corn (likely South American origin) overnight.
  • But with severe technical chart damage done, bulls aren't likely to come in and actively rebuild long positions immediately.
  • Gulf corn basis is 3 cents firmer for immediate delivery to stand 56 cents above May futures.
  • Meanwhile, the dollar index is firming as the overall euro-zone situation remains a concern for traders on news its unemployment rate remained relatively unchanged at 12% in February.

 

Soybean futures are roughly 6 to 10 cents higher on corrective trading following a sharp two-day decline.

  • May soybean futures declined 60-plus cents the previous two trading days in reaction to the bearish Grain Stocks Report, but is benefiting from short-covering this morning.
  • There is also market chatter regarding China's supplies tightening due to port congestion in Brazil, which could result in some "fill-in" purchases from the U.S. until Brazilian supplies begin to flow more regularly.
  • Gulf soybean basis is 11 cents higher for immediate delivery to stand 75 cents above May futures, suggesting some fresh demand news may be coming soon.
  • While May beans have violated support at the March low, no major technical damage will be done unless the contract plunges below the January low of $13.44.

 

Wheat futures are 7 to 11 cents higher at all three exchanges on spillover from neighboring pits and short-covering.

  • Following a two-day 70-plus cent decline in May Chicago wheat futures, the contract is enjoying short-covering this morning on ideas the downside has been overdone -- at least for now.
  • But wheat futures need a dose of fresh export news to encourage traders to rebuild long positions. South Korea bought 55,000 MT of optional origin feed wheat overnight, while Taiwan and Jordan issued wheat tenders to buy wheat.
  • The first official crop condition ratings of the season are also supportive for the market as they show winter wheat conditions below year-ago levels. Click here for the Pro Farmer Crop Condition Index.

 

Live cattle futures are called mixed as traders reevaluate positions.

  • Nearby live cattle futures posted slight losses yesterday as traders are reevaluating positions on indications a low has been struck against ongoing demand concerns.
  • Hopes that retailers will begin buying beef for grilling season is lifting spirits. Choice boxed beef values improved $1.48 yesterday and but Select declined 7 cents.
  • Boxed beef movement of 143 loads was light and traders will want to see this improve in order to suggest the cash market can build on last week's higher cash prices
  • This week's showlist is up from last week, which puts more pressure on the boxed beef market to improve.

 

Lean hog futures are called to open mixed amid bull spreading.

  • Nearby lean hog futures finished firmer amid bull spreading yesterday in reaction to unexpected strength in the cash market. But with packer margins below breakeven, it's uncertain how long they will continue to pay higher prices for cash hogs.
  • Upside potential for nearby lean hog futures will be limited by the hefty premium those contracts hold to the cash index.
  • There is also concern about pork demand after just 11.25 loads of cuts and trim changed hands yesterday, though pork cutout values improved 75 cents.
     
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