Market Snapshot, Noon CT -- (VIP) -- March 4, 2014

March 4, 2014 05:55 AM

Corn futures continue to push higher with most 2014 contracts 5 to 7 cents higher.

  • Corn futures continue to firm after seeing pressure in the overnight session on ideas export demand for U.S. corn remains.
  • Corn is also seeing spillover from gains in soybean futures.
  • A relaxation in tensions concerning Ukraine pressured futures in the overnight session, but traders have returned to the buy side on ideas exports from that country may be slowed until the situation clears.
  • Ukraine's ag ministry says the country's grain exports will likely total 8.7 MMT the remaining four months of the 2013-14 marketing year. Since July 1, the ministry says Ukraine's grain exports totaled 24.7 MMT, which compares to 18.1 MMT during this period last year.
  • Providing additional support is news private analytical service Informa Economics lowered its Brazilian 2013-14 corn estimate to 65.45 MMT from its previous estimate of 66.55 MMT. But the firm also reportedly left its Argentine corn crop projection unchanged at 22.6 MMT.
  • Gulf corn basis is steady for March through May delivery and 1 cent weaker for June and July delivery in midday trading.

Old-crop soybeans continue to post double-digit gains and are trading near their highs for the day. New-crop futures are 4 to 6 cents higher.

  • Ideas of continuing strong export business has soybean futures moving higher today, with additional support coming on news of cuts in Brazilian crop estimates by private crop watchers.
  • Private analytical firm Informa Economics cut its Brazilian crop estimate to 88.8 MMT form 89.7 MMT and Pro Farmer South American consultant Dr. Michael Cordonnier has now cut his Brazilian crop estimate four weeks in a row.
  • In addition, Informa also lowered its Argentine soybean crop projection to 54 MMT from 57 MMT.
  • Meanwhile, ongoing shipping delays in Brazil continue to keep the U.S. the most reliable source of soybeans for the global market.
  • Gulf soybean basis jumped 15 cents for March delivery at midday, indicating strong immediate demand. April delivery is unchanged, May is 2 cents higher, June 6 cents higher and July 3 cents weaker.

All three wheat flavors are favoring the plus side with the exception of the March HRW and March HRS contracts. Deferred HRS contracts are 5 to 9 cents higher; deferred HRW contracts are 1 to 3 cents higher; SRW contracts are 3 to 4 cents higher.

  • Traders continue to favor the plus side today despite easing tensions in Ukraine, a top wheat competitor to the U.S. That nation could still see a slowdown in shipments due to the ongoing struggles with Russia.
  • Traders are paying more attention to crop condition reports which show ongoing deterioration with the HRW wheat crop in Kansas, Oklahoma and Texas. But countering this is the forecast for much-needed precip in the region this week.
  • Traders are shrugging of news private analytical firm Informa Economics increased its India wheat crop estimate by 9 MMT to 108 MMT.
  • Gulf basis is steady for both SRW and. HRW wheat at midday.

Live and feeder cattle futures are moderately to sharply higher this morning.

  • Strong cash fundamentals continue to propel futures higher.
  • June and August live cattle futures gapped higher at the open and have continued to trade higher, leaving the gaps untested and unfilled.
  • The boxed beef market continued to march higher. Choice boxed beef values rose $1.58 and Select jumped $1.33 this morning. Movement is a somewhat slow 61 loads, however.
  • Slightly tighter showlist estimates out of Colorado, Kansas and Texas along with steady numbers in Nebraska are offering support.
  • Packers continue to cut in the red, but the rising wholesale market is narrowing the losses. But the continuing red ink will make them reluctant to pay higher cash prices relative to last week's record-setting trade.
  • Feeder cattle futures are following live cattle futures higher despite strong corn prices and a higher U.S. dollar index.

Lean hog futures have moved limit higher on continuing concerns over PEDV.

  • Lean hog futures have moved to limit higher in the April through August contracts on growing concerns over continuing pig losses due to PEDV.
  • The rise comes despite a dip in the pork cutout value of 82 cents this morning. Movement is moderate at 166.68 loads.
  • Traders are brushing off news Russia said more guarantees will be needed before it will lift its U.S. pork import ban. The country had previously indicated it would lift the ban March 10. Political tensions are likely behind this shift.
  • Traders are not overly concerned about narrowing the wide premium the front-month contract holds to the cash hog index. The index continues to rise and much time remains before the contract's expiration. Plus, packer profit-margins remain in the black.
  • Packers are again paying steady to higher prices for cash hogs as frigid temps are limiting supplies.
  • While technicals remain in bulls' favor, it's also important to note that increased price volatility at high prices can be a sign the market is in the process of putting in a high.
  • The front-month contract remains severely overbought.
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