Market Snapshot, Noon CT (VIP) -- April 14, 2014

April 14, 2014 07:13 AM

Corn futures continue to trade 4 to 6 cents higher with old-crop months leading gains.

  • Corn futures are higher on the sudden shift back to winter-like temperatures along with snow over portion of the Midwest and spillover strength from wheat.
  • The gains come despite gains in the U.S. dollar index.
  • Along with the shift to cold temperatures and a chance for frost tonight, hefty rains dumped as much as 3 to 4 inches in Iowa and Wisconsin.
  • With temperatures 20 to 30 degrees below normal and the forecast calling for more cold and rain by the weekend, traders are starting to fret about planting delays. At the very least, the unfavorable weather may reduce the ability of farmers to boost corn plantings above stated March intentions.
  • Early gains in corn futures came as the May contract found buying support on an early test of Friday's low at $4.97 1/2. Buying accelerated as that contract surged above $5.00.
  • Adding to this morning's upside momentum is today's weekly export inspections report from USDA. The report came in well above expectations at 1,448,812 MT.
  • French analyst Agritel lowered its 2014 corn production outlook by a combined 3.9 MMT for Russia and Ukraine to 33.1 MMT, citing growing tensions in the region and dry weather. This would be down 14.2% from 2014.
  • Basis levels at interior points are listed as steady but weaker at the Gulf.
  • USDA will issue its first planting update this afternoon with analysts expecting it to show about 3% to 5% of the crop planted as of Sunday. That compares to 2% a year ago and 6% to 7% on average.


Soybean futures are posting mostly modest of 1 to 4 cents with the exception of the July and August contracts, which are up 9 and 7 cents, respectively.

  • Short-covering and spillover support from wheat and corn futures have soybeans on the plus side, despite a stronger U.S. dollar index.
  • The tight old-crop supply situation is lifting summer-months contracts, while new-crop futures are edging higher to hold onto record-high planted acreage projections.
  • This morning's weekly soybean export inspections came in a disappointing 267,939 MT, which was below expectations and 241,688 MT from the previous week.
  • While weekly export inspection tallies have dropped, this decline has come much later than expected and the overall pace still remains 22.1% above a year ago and above the pace needed to reach USDA's export projection.
  • Basis levels in interior markets are steady for soybeans, as are bids at the Gulf.


Wheat futures continue to hold strong gains in all three flavors today but have backed off from their highs in late-morning trading. HRW wheat is still leading with gains in the 20s.

  • A rise in tensions in the Black Sea regions along with rising weather concerns in the Southern Plains boosted wheat futures from the start of day trade this morning.
  • Expected precipitation for the Southern Plains did not develop but cold temps have moved in to chill the region at a key development time for the crop. Freeze warnings are in effect as far south as the Texas Panhandle tonight and Tuesday.
  • As a result of the miss on precip, traders look for this afternoon's crop condition ratings from USDA to show continued deterioration.
  • In addition, the Northern Plains are dealing with cold temps and snow, which is raising concerns about planting delays.
  • The outbreak of more conflict in eastern Ukraine has traders again concerned export shipments from the region will be disrupted.
  • A stronger-than-expected weekly export inspections report from USDA is contributing to today's strong gains. The report came in at 683,544 MT, 57,140 MT higher than a week earlier.
  • Agritel reportedly lowered its wheat crop forecast for Ukraine, Russia and Kazakhstan by nearly 4 MMT since February to 81.5 MMT. This would be down 9% from 2013.


Live cattle futures are mixed with April and May futures slightly higher while deferreds are slightly lower. Feeder cattle futures are seeing similarly split trade.

  • Cattle futures are slightly higher in the front months due to the $2 discount that continues to exist versus current cash cattle trade. The cash market Friday saw cattle moving at $147 in the Southern Plains and at $148 to $150 in Nebraska. This was steady to $2 lower versus a week earlier.
  • Packers' cutting margins continue to weaken, however, which will continue to make them reluctant buyers. Some plants may close their doors Friday in observance to Good Friday and to improve margins.
  • Traders are getting a mixed message on wholesale beef today, as Choice boxed beef prices are 66 cents higher but Select beef is 74 cents lower. Beef movement is encouraging, however, at 117 loads.
  • Feeder cattle futures are slightly higher on the positive chart patterns.


Lean hog futures continue to notch slight losses in the expiring April contract. Deferred months are slightly to sharply higher with July leading gains.

  • The expiring April contract saw a little selling pressure just ahead of its expiration at noon today. That's despite its roughly $2 discount to the cash hog index.
  • April and June hogs are more than $1 higher as they are even more heavily discounted to the cash index.
  • Cash hog bids are steady to lower today as packers prepare for a holiday-shortened week. Packers are again cutting in the black but their buying interest will be restrained through going this holiday week.
  • The pork cutout value firmed 39 cents this morning, but movement was light at just 110.23 loads.
  • Concerns with porcine epidemic diarrhea virus (PEDV) remain as underlying source of support, especially for summer-month contracts when market-ready supplies will be the tightest.
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