Market Snapshot, Noon CT -- (Advice) -- February 7, 2014

February 7, 2014 06:08 AM


Corn futures are fractionally to 1 cent higher in most contracts.

  • Corn futures are seeing light trading action as traders even positions ahead of the weekend. March futures again found support at the December highs of $4.40 this morning.
  • Trading activity is limited as traders prepare for Monday's USDA Supply & Demand Report. Pre-report expectations are for USDA to lower its 2013-14 U.S. stockpiles estimate from January by 25 million bu. to 1.606 billion bu. -- still up substantially from 821 million bu. last year.
  • Futures are receiving support from a lower U.S. dollar index. Traders view that as a positive as they look at strong weekly export totals, which adds to ideas prices have reached a level that is stimulating demand.
  • Adding to that view is news from USDA this morning an unknown buyer purchased 141,200 MT of old-crop U.S. corn.
  • Also providing support is news the USDA's ag attaché in Argentina has lowered its estimate of that nation's corn crop by 1.2 MMT to a level underneath USDA's official estimate.
  • Gulf corn basis is steady for most delivery periods at midday with the exception of the March delivery period which is 1 cent firmer.

Soybean futures are 1 to 2 cents higher this morning.

  • Soybean futures have favored the plus side in morning trading. Front-month contracts dipped into negative territory briefly on bull-spread unwinding but have again firmed.
  • The dominant trading theme is position evening ahead of the weekend and Monday's Supply & Demand Report.
  • Pre-report expectations are for USDA to peg U.S. 2013-14 soybean stockpiles at 143 million bu., which would be down 7 million bu. from its January peg and up 2 million bu. from year-ago.
  • The weaker tone in the U.S. dollar index is also supportive.
  • The market is also finding light support from news USDA's ag attaché in Argentina has lowered its estimated of that country's soybean crop to 54 MMT, which compares to USDA's official projection of 54.5 MMT.
  • Gulf soybean basis is steady in midday trading.

Wheat futures sharply reversed course at midday. SRW wheat futures are 8 to 9 cents lower, while HRW is down 4 to 6 cents. HRS is mixed.

  • Early gains in the wheat market have given way to profit-taking, triggering sell-stops on the way down.
  • The market initially benefited from the decline in the U.S. dollar index is also supporting today's gains along with spillover from the positive corn market.
  • Traders continue to sort out the mix of news on the winter wheat crops with recent monthly crop condition reports showing deterioration along with drought over much of the area. However, recent snowcover now protects the crop from ongoing cold temps.
  • Gulf SRW and HRW wheat basis is steady in midday trading.

Live cattle futures are slightly to sharply higher with nearbys leading gains. Feeder cattle are slightly to moderately higher.

  • Live cattle futures continue to post gains as traders wait for active cash cattle trade to develop. February and April futures are leading gains as they narrow their discount to the limited cash trade of $141 reported yesterday.
  • Around 5,000 head changed hands in Nebraska yesterday at $141, which is down $5 from the bulk of sales in the region last week.
  • Despite tighter showlists and stressful weather, most expect cash cattle trade to take place below last week's $144 to $145 prices on the Southern Plains. Bids are at $138 in the region.
  • Wholesale beef prices fell again this morning with Choice beef down $1.26 and Select beef down $2.35. Movement was robust at 117 loads, however.
  • A softer greenback on disappointing jobs data and the firmer live cattle prices prices are adding support to the feeder cattle market.

Lean hog futures are slightly higher this morning.

  • Lean hog futures are firmer on steady to higher cash hog bids. Prices are stronger as producers are reluctant to move hogs due to the cold weather and difficult road conditions.
  • Wholesale pork prices improved this morning with the cutout up 34 cents and movement a solid 224.1 loads. Traders remain encouraged by hopes pork demand will improve as retailers pass on record high retail beef prices to consumers.
  • Hog weights continue to decline, but total production remains well above year-ago levels.
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