Market Snapshot, Noon CT -- (VIP) -- February 20, 2014

February 20, 2014 06:07 AM

Corn futures are fractionally higher in the front three contracts and fractionally to 2 cents weaker in deferred contracts.

  • Corn futures are posting a choppy trading day in a narrow range as it absorbs the data coming from USDA's annual outlook conference and the stronger U.S. dollar index.
  • While traders have plenty of data to digest from USDA's conference, most are finding it aligns with current trade thinking and is already priced into the market.
  • USDA says it looks for 2014 corn plantings to decline by 3.5% from last year to 92 million acres; down from its previous baseline figure of 93.5 million acres. If achieved it would be the lowest total planted acres since 2011.
  • The weekly export sales data will be released on Friday due to the Monday holiday. Traders will be looking to a continuation of the strong demand pace in tomorrow's report.
  • March futures have spent the morning session testing support at the $4.50 area, which previously served as resistance.
  • Ethanol production rose 1,000 barrels per day (bpd) to 903,000 bpd for the week ending Fed. 14. Stocks rose 141,000 barrels to 17.2 million barrels.
  • Gulf corn basis is steady at midday with the exception of the June and July delivery periods which are 1 cent weaker.

Soybean futures are 2 to 5 cents higher following a weaker start.

  • Soybean futures continue to trade higher, led by the November contract, as traders view today's planted acreage projection from USDA as friendlier than expected.
  • The stronger U.S. dollar index prompted the weaker initial tone
  • Before the start of the day session, USDA released its projection of 2014 soybean plantings ahead of the agency's annual outlook conference today. USDA's call for a 4% rise in planted soybean acreage from last week and the figure came in lower than expected by traders and prompted buying in futures.
  • USDA indicates it looks for total 2014 soybean plantings to reach a record 79.5 million acres, up from USDA's prior estimate of 78 million acres.
  • March futures found support early on a test of the steep late-January/February uptrend line and have edged higher.
  • Gulf soybean basis is steady at midday for all delivery periods.

SRW futures are 2 to 4 cents lower, with HRW trading fractionally lower and HRS 1 cent higher to 2 cents lower.

  • Wheat futures continue to post mostly corrective action today following the recent runup in prices, but prices have trimmed earlier losses.
  • The stronger U.S. dollar index is also contributed to the defensive trend this morning.
  • Data coming from USDA's annual outlook conference did not surprise the market.
  • USDA pegs total 2014 wheat seedings at 55.5 million acres, down from its earlier estimate of 57 million acres.
  • Another winter storm with arctic temperatures is moving across winter wheat country, providing light support.
  • March SRW futures continue to test support at the $6.12 area, an area of previous resistance.
  • Gulf SRW basis is 4 cents higher for immediate delivery at midday. Basis levels are steady for all other delivery periods.

Live cattle futures are steady to slightly higher, with feeder futures mixed.

  • Traders continue to lead to the plus side today on expectations of steady to higher cash trade this week and ideas the wholesale market may have posted a low.
  • After gaining nearly $6 the past week, Choice boxed beef values rose another 44 cents this morning but Select beef slipped 19 cents. However, movement is a positive 114 loads.
  • Today's winter storm moving across the Midwest will likely reduce livestock movement, which is bringing some light support for the market.
  • Traders also continue to align positions ahead to tomorrow's Cattle on Feed Report, which is expected to show On Feed at 96% of year-ago levels.
  • Traders also found USDA's projections offered at its annual outlook conference, while not a surprise, as supportive to cattle prices in general.
  • Feeder cattle futures are mixed on the firmer nearby live cattle futures, but the positive lean to the corn market has dampened buying interest.

Lean hog futures have reversed course with from months slightly higher and July and later contracts slightly weaker.

  • Lean hog futures gapped lower at the open on profit taking but prices have reversed course and moved higher, closing the opening gaps.
  • Traders remain reluctant to press prices sharply higher due to continuing weakness in the pork cutout market. The pork cutout dropped $2.19 today but movement is positive at 270.97 loads.
  • Positive packer cutting margins along with reduced receipts due to the the winter storm has traders looking for steady to higher cash hogs.
  • USDA's annual outlook conference today acknowledged PEDV is likely to take a bite out of supplies this year.
  • The National Animal Health Laboratory Network's latest report shows the total number of new cases down from the previous week, but still at an elevated level.
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