Market Snapshot, 8:30 am CT (VIP) -- February 26, 2013

February 26, 2013 02:45 AM
 

Corn futures are mixed, with old-crop contracts 1 to 3 cents higher and new-crop contracts 1 to 3 cents lower.

  • Bull spreading is being seen in the corn pit this morning, with nearby contracts leading gains amid short-covering.
  • Traders are keeping a close eye on outside markets as they weigh the risks of Congress allowing sequestration to go into effect on Friday against a pickup in the housing market. Traders are also closely monitoring the Italian political situation, which is in flux.
  • Gulf corn basis is steady to 1 cent higher for nearby delivery and 3 to 5 cents firmer for April through June delivery. This reflects a pickup in demand, but is also a reflection of tightening supplies.

 

Soybean futures are 3 to 4 cents weaker amid followthrough selling.

  • Traders' concerns about Brazilian shipping delays have been somewhat alleviated as Brazilian port workers have pledged to not strike through March 15.
  • While backlogs at Brazilian ports remain, traders expect South American soybeans to soon be readily available and for a longer-than-normal shipping season given record supplies. This will result in softer demand for U.S. soybeans.
  • Another winter storm is moving into the Corn Belt this morning, bringing needed moisture. The latest Palmer Drought Index reflects improvement to the drought across the western Corn Belt, but the need for more precip.

 

Wheat futures have seen two-sided trade, but are mostly 1 to 2 cents lower at all three exchanges this morning.

  • Wheat has been choppy at times to remain aligned with the corn market, but is currently more influenced by the lack of fresh news and spillover from soybeans.
  • Additional pressure is coming from state crop and weather reports that reflect soil moisture improvements across most of the HRW Wheat Belt. Some improvement to crop conditions was also noted, but ratings are still worse than year-ago.
  • Another system has dumped near-record to record snowfall on areas of the Central and Southern Plains, which is further improving soil moisture conditions.

 

Live and feeder cattle futures are called to open mixed as traders wait on direction from the cash market.

  • Traders expect at least steady cash cattle trade this week due to tighter showlists and some packers may raise bids due to winter storm disruptions across the Plains that are also stressing animals.
  • Meanwhile, the boxed beef market got off to a lackluster start Monday. Beef prices need to post strong improvement in order to signal a seasonal low has been secured.
  • A choppy tone in the corn market could result in two-sided trade in feeder cattle futures, as well.
  • Traders in the livestock markets are also watching outside market developments. Concerns that lawmakers will not reach a deal before across-the-board spending cuts go into effect this Friday raise concerns about meat demand.

 

Lean hog futures are called mixed on a continuation of yesterday's choppy trend.

  • Lean hog futures are expected to be mixed this morning as traders weigh demand concerns against the oversold condition of the market.
  • Traders cite the build in pork stocks compared to year-ago levels as evidence that demand has slowed.
  • Meanwhile, packers are enjoying profitable margins, but that hasn't raised demand for cash supplies. The cash hog market is called steady to lower despite a winter storm moving into the Corn Belt.
     
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