Market Snapshot, 8:30 am CT (VIP) -- March 25, 2013

March 25, 2013 03:42 AM
 

Corn futures are mixed, with the May and July contracts around 2 cents lower while deferred months are steady to 2 cents higher.

  • Bull spread unwinding is being seen in corn futures this morning. Old-crop futures are under light pressure while scattered buying is being seen in new-crop futures.
  • Outside markets are sending mixed signals. The U.S. dollar index has strengthened considerably this morning despite news the euro-zone will bail out Cyprus. Crude oil is firmer and gold is lower.
  • Gulf corn basis is 1 cent firmer for immediately delivery to stand 59 cents above May futures to reflect tight old-crop supplies.
  • Traders' focus will be on evening positions ahead of Thursday's key USDA reports, as the agency releases its survey-based Prospective Plantings Report.

 

Soybeans are weaker, with old-crop contracts 3 to 7 cents lower and new-crop futures fractionally to 3 cents lower.

  • Old-crop futures are being pressured by strength in the dollar index.
  • New-crop futures have softened despite news China has purchased 234,000 MT of U.S. soybeans for 2013-14. The purchase signals China views U.S. soybeans as a "value."
  • Gulf soybean basis is steady to 2 cents higher for nearby delivery to stand 68 cents above May futures. Firmer basis suggests a pickup in demand for old-crop soybeans, as rumored last week due to ongoing shipping delays in South America.

 

Wheat futures are 1 to 4 cents lower on strength in the dollar and spillover from nearby corn and soybean futures.

  • Strength in the dollar index makes traders concerned about the competitiveness of U.S. wheat on the global market.
  • A lack of fresh news is also weighing on wheat futures. Wheat needs fresh demand news to keep bulls interested.
  • May Chicago wheat is trading at a slight premium to May corn futures this morning.
  • Traders' focus is on evening positions ahead of Friday's key stocks and acreage data.

 

Live cattle futures are called higher in reaction to Friday's Cattle on Feed Report.

  • Friday's Cattle on Feed Report was given a bullish read. The report is especially supportive for deferred futures but should also help nearby futures secure a near-term low.
  • Meanwhile, Friday's Cold Storage Report showed beef stocks above expectations, but up "just" 1% from last month.
  • Traders will also be keeping a close watch on the boxed beef market after prices softened sharply last week. Key will be if movement picks up as it would suggest demand has improved.
  • Feeder cattle futures are called higher based on tightening calf supplies.

 

Lean hog futures are called mixed as traders gauge demand for cash hogs.

  • Lean hog futures are expected to see a choppy start, with pressure limited by expected strength in cattle futures.
  • But buying in hog futures will be limited by expected weakness in the cash market. Packers say they are well bought ahead for the week, which is expected to result in steady to weaker bids this morning
  • Friday's Cold Storage Report showed pork stocks in frozen storage at the end of February coming in just below expectations and up 5% from the previous month.
     
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