Market Snapshot, 8:30 am CT (VIP) -- March 4, 2013

March 4, 2013 02:49 AM

Corn futures are mixed, with old-crop contracts slightly firmer and new-crop months mildly weaker.

  • Old-crop corn futures are being supported by fresh demand news. USDA announced an unknown destination purchased 100,000 MT of old-crop corn, which signals current prices are a value.
  • Gulf corn basis is 5 cents higher for immediate delivery to stand 70 cents over May futures and is 2 cents higher for April delivery.
  • But given the overall lackluster pace of exports that are projected to be historically low, traders want to see continued demand improvement and recognize that if prices rally much, demand will slow.
  • New-crop futures are being mildly pressured as more precip is headed to the Corn Belt this week. Snow is moving through the region today and tomorrow and rain is expected late in the week.
  • Meanwhile, the former director of China's State Grain Administration says barring unfavorable weather, the country is set to produce a record corn crop in the year ahead, which will limit growth in trade with the United States.


Soybean futures are mixed, with nearby contracts modestly higher while new-crop contracts are down mostly around a penny.

  • Bull spreading is the featured activity in the soybean market this morning as traders recognize the tight old-crop stocks situation.
  • Another blast of winter weather is tracking across the western Corn Belt this morning. Traders believe the active weather system will continue to dent the western Corn Belt drought and improve 2013-crop prospects.
  • Gulf soybean basis is steady to 1 cent lower for immediate delivery which suggests a softening in old-crop soybean demand.
  • Traders will also begin to even positions ahead of Friday's USDA Supply & Demand Reports, although few if any changes to demand projections are expected.


Chicago and Kansas City wheat are 4 to 7 cents lower, with Minneapolis 3 to 6 cents lower in all but the front-month contract.

  • Wheat futures are being pressured by recent moisture improvements across the HRW Wheat Belt, which is easing crop concerns for now.
  • Traders expect this week's drought maps to reflect improvement in the Central and Southern Plains, although there's only limited precip in the forecast for this week.
  • March Chicago wheat futures are trading at around an 18-cent discount to March corn futures. Strength in old-crop corn this morning should help to at least limit pressure on nearby wheat futures this morning.
  • Outside markets are choppy this morning, but slight strength in the U.S. dollar index is also providing pressure to wheat futures.


Live cattle futures are expected to be mixed this morning as traders watch the boxed beef market.

  • Signs the boxed beef market has posted a near-term low supported live cattle futures last week, but traders want confirmation of a low via higher prices this week before they aggressively reestablish long positions.
  • On Friday, Choice boxed beef values were up $1.94 and Select rose 5 cents, though movement was only 144 loads.
  • Last week's stressful feedlot conditions limited weight gain, which is expected to tighten this week's availability of market-ready supplies.
  • April live cattle are trading at a slight premium to last week's $128 cash cattle trade.


Lean hog futures are called mixed, with some short-covering likely to support nearby futures.

  • Traders' attitudes toward the hog market remain negative, but they also realize futures are oversold and due for a correction.
  • Also slightly supportive for futures this morning is the winter storm moving across the Corn Belt, which will slow hog movement.
  • As a result, the cash hog market is called mostly steady with some firmer undertones.
  • Packers are still working with positive margins, but the pork cutout value slipped 26 cents on Friday, which keeps demand concerns on traders' minds.
  • April lean hog futures are trading at around a $2 premium to the cash index, which limits buying interest.
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