Market Snapshot, 8:30 am CT (VIP) -- March 28, 2013

March 28, 2013 03:45 AM
 

Corn futures have seen little price movement so far as traders await USDA's key data. Futures are mostly around 2 to 3 cents weaker.

  • Traders are anxiously awaiting the 11:00 a.m. CT release of USDA's Quarterly Grain Stocks and Prospective Plantings Reports, as they will set the price trend into spring planting season.
  • For old-crop the first-half usage pace will determine how much of the drought-afflicted crop will be left for the remainder of the marketing year.
  • New-crop traders will use the planted acreage projection as a figure to add or subtract acres as we move into planting season. The average trade guess is 97.3 million acres -- in line with year-ago.
  • This morning's weekly export sales data showed corn sales of 295,100 MT for 2012-13 and 18,900 MT for 2013-14 -- coming within traders' expectations. Japan and China were the lead buyers of old-crop corn.
  • Gulf corn basis is steady this morning to stand 62 cents above May futures for immediate delivery.

 

Soybean futures have moved off earlier lows to trade mostly 1 to 4 cents lower.

  • Price action has been muted as traders await USDA's key report data. The Quarterly Grain Stocks Report will set the tone for old-crop futures, as stocks as of March 1 are expected at 947 million bushels.
  • Meanwhile, traders look for planted soybean acres of 78.5 million, which, if realized, would be 1.3 million acres above last year's planted tally. Anything below this figure would be viewed as price-positive for new-crop futures.
  • Weekly export sales of 66,400 MT were dismal for 2012-13, but strong sales of 607,700 MT for 2013-14 pushed the combined tally within expectations.
  • The weekly sales report suggests demand for old-crop soybeans has softened, although China's appetite (the primary buyer of new-crop soybeans) remains strong for new-crop supplies.
  • Gulf soybean basis is steady this morning to stand 71 cents above May futures for immediate delivery.

 

Wheat futures are mostly around a penny higher this morning amid spreading with corn, although most contracts have moved off earlier highs.

  • Focus in the wheat pit is on evening positions ahead of the 11:00 a.m. CT USDA reports.
  • Traders look for USDA to peg wheat stocks as of March 1 at 1.167 billion bu., which, if realized, would be down around 32 million bu. from last year at this time.
  • All wheat planted acreage is expected at 56.4 million, which compares to 55.7 million last year. Spring wheat acreage of 12.5 million is expected up just marginally from 12.3 million last year.
  • This morning's weekly export sales data is positive for the market and is helping to support futures. The report showed sales of 580,300 MT for 2012-13 and 248,300 MT for 2013-14. Combined, the tally came in above expectations.
  • Old-crop wheat sales increased 20% from the previous week, with Brazil and Japan the lead buyers. The tally certainly suggests U.S. prices are competitive on the global market.

 

Live and feeder cattle futures are called steady to higher on followthrough from yesterday's gains.

  • Live and feeder cattle futures are expected to see a lift from ideas those markets are in the process of putting in near-term -- and possibly longer-term -- lows.
  • April live cattle posted a strong upside day of trade on the daily chart, but still have a ways to go to confirm a low has been posted.
  • Traders are still waiting on active cash cattle trade to get underway, but after yesterday's gains, feedlots are asking for $1 to $2 above last week's $125 trade -- the same level that triggered at least one feedlot in Texas to move cattle earlier this week.
  • But ongoing weakness in the boxed beef market will make it difficult for cattle to generate much more than technical buying as traders remain concerned about demand. The good news, however, is that lower beef prices have spurred a pickup in beef movement this week.

 

Lean hog futures are expected to be choppy as traders wait on this afternoon's Hogs & Pigs Report.

  • Traders expect this afternoon's Quarterly Hogs & Pigs Report to reflect slight expansion in the hog herd, with All Hogs & Pigs expected at 100.7% of year-ago levels. The pig-per-litter category will provide the read of expansion and is expected to come in at 101.1% of year-ago.
  • Meanwhile, a combination of steady to firmer cash hog bids seen this week and weakness in the pork cutout market has pushed packer profit margins to just above breakeven. But cash sources say packers may still be forced to raise bids today to acquire needed supplies for early next week.
  • April lean hog futures posted a bullish reversal on the chart yesterday and ended the day at more a $5.75 premium to the cash index. This signals traders believe the worst is behind in terms of demand, but it raises the risk of another sell off.
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