Market Snapshot, Noon CT (VIP) -- Advice -- February 13, 2014

February 13, 2014 05:55 AM

Soybean cash-only marketers: Trim old-crop stocks... March soybean futures have rallied to price levels that have stalled multiple rally attempts since fall. With the Brazilian export season underway and China starting to cancel some U.S. soybean purchases, cash-only marketers are advised to take advantage of the price strength by making a 15% 2013-crop sale to get to 90% sold on old-crop. The remaining 10% of unpriced old-crop supplies will be held as gambling stocks as soybean supplies will be tight through the 2013-14 marketing year.

Livestock producers: Claim profits on 1st-qtr. meal coverage... March soybean meal futures continue to post new contract highs on a near-daily basis. But with just two weeks until the contract enters delivery, we aren't willing to gamble on a continued rally. Livestock producers are advised to claim profits on the 25% 1st-qtr. meal coverage in March soybean meal futures.


Corn futures continue in narrow, range-bound trade with marginal to 2 cent losses.

  • Early support came from a stronger-than-expected showing in the weekly export sales data, as it showed sales of nearly 1.270 MMT for 2013-14 and 71,100 MT for 2014-15.
  • The strong sales tally eased concerns the recent rally has slowed demand.
  • But since then, futures have slipped slightly despite a sharply lower tone in the U.S. dollar index amid spreading with soybeans that are higher.
  • Traders are also digesting this morning's long-term baseline projections from USDA. The agency pegs 2014 corn acreage at 93.5 million and says corn carryover will range 1.882 to 2.877 billion bu. through the 2023-24 marketing year.
  • December corn futures remain within the boundaries of yesterday's trading range.
  • Gulf corn basis remains unchanged at midday to stand 76 cents over March futures.


Soybean futures continue to post double-digit gains in nearby contracts, with new-crop futures mostly 8 to 9 cents higher.

  • The combination of a weaker U.S. dollar index and ideas the downside was overdone yesterday are lifting soybean futures.
  • And, while this morning's weekly sales report showed purchases by importers slowed dramatically in the reporting period, the fact that China was the lead buyer of old- and new-crop beans is encouraging.
  • Also, soybean exports of 1.494 MMT impressed, as did weekly soymeal and soyoil sales.
  • Traders are also digesting USDA's long-term baseline projections, which peg 2014 soybean acreage at 78 million and carryover in a range of 203 to 245 million bu. through 2023-24.
  • Gulf basis has stabilized after softening 1 to 3 cents this morning.


All wheat flavors are mostly 3 to 5 cents higher at midday on spillover from soybeans and dollar weakness.

  • A weaker U.S. dollar index and a friendlier tone in the soybean pit are lifting wheat futures.
  • Traders are also encouraged by this morning's weekly wheat sales data that showed sales of 597,000 MT for 2013-14 and 29,600 MT for 2014-15 -- matching expectations.
  • Light support also stems from news Strategie Grains lowered its EU 2014-15 soft wheat production forecast by 0.3 MMT to 137.5 MMT. However, the firm also raised its export forecast for the grain by 1.2 MMT to 21.7 MMT.
  • Gains are being somewhat limited by the forecast for warmer, milder weather on the Plains, although drier conditions are expected through the next 7 to 10 days.
  • USDA this morning released its long-term baseline projections and pegged 2014 all wheat acreage at 57 million, with carryover expected to range between 642 and 794 million bu. through 2023-24.
  • After seeing 5- to 8-cent losses this morning, Gulf SRW basis has stabilized.


Live cattle futures are slightly to sharply higher, with nearbys leading gains. Feeder futures are sharply higher across the board.

  • Cattle traders are focused on the tight supply outlook, with buy stops triggered to extend early gains.
  • Light cash cattle trade is being reported at $142 in Kansas this morning, which the feedlot says is $1 higher than last week.
  • Choice beef values are 48 cents softer this morning, but packers have moved 144 loads of beef already this morning. Traders are encouraged by the surge in beef movement the last two days as it signals prices have declined to"value" levels.
  • Support also stems from news weekly beef exports surged to 16,600 MT the week ended Feb. 6, more than doubling the prior week's tally.
  • In USDA's long-term baseline projections released this morning, the agency projected cash steer prices into 2022 to range a robust $125.26 to $131.58.
  • Feeder futures are being supported by spillover from live cattle and a choppy to weaker tone in the corn market.


Lean hog futures are posting slight to moderate gains in most contracts, with far-deferreds mixed.

  • A stronger cash hog market and tighter-than-expected showlists are boosting lean hog futures this morning.
  • The cash market is steady to 50 cents higher, with a few $1 higher bids being reported to signal strong packer demand for hog supplies.
  • After yesterday's strong gains, pork cutout values are 84 cents weaker this morning on more moderate movement.
  • The winter storm that is impacting the East Coast has caused some plant closures, but packers have plenty of incentive to keep kill runs as full as possible given profitable margins.
  • April lean hog futures have moved to its highest level since late October, which makes the contract high of $96.45 bulls' next objective.
  • In USDA's long-term baseline projections, the agency projected cash hog prices to range $62.11 to $70.22 through 2022.
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