Market Snapshot, Noon CT (VIP) -- April 15, 2013

April 15, 2013 07:06 AM
 

Corn futures have extended early losses to trade 12 to 18 cents lower with new-crop futures leading losses.

  • The bulk of today's price pressure is coming from a general risk-off attitude after disappointing Chinese economic data overnight.
  • A more favorable forecast is weighing on the corn market today. While the five-day forecast calls for more rain and chilly temps, the extended outlook now calls for below-normal precip chances, which could allow farmers to get into the fields.
  • Light pressure also stems from news Chinese farmers plan to seed 4.1% more corn this year.
  • Weekly corn export inspections of 14.701 million bu. improved over last week and met expectations, but the overall pace of exports fell relative to year-ago.
  • While Gulf basis levels improved last week, the market has yet to learn of any fresh export demand. This is also weighing on futures.

 

Soybean futures have softened to trade mostly 12 to 20 cents lower.

  • Soybean futures are being pressured by a number of data releases today.
  • For one, Chinese GDP growth of 7.7% came in below last quarter and expectations.
  • Weekly soybean export inspections of 4.813 million bu. fell well short of expectations and declined 11.41 million bu. from last week.
  • NOPA soybean crush data was also disappointing this morning. Soybean crush in March totaled 137.08 million bu., which was up 758,000 bu. from last month but below expectations (for 140 million bu.) and year-ago. Soyoil stocks for March came in at 2.765 billion lbs. -- 117 million lbs. below expectations.
  • Gulf soybean basis rose 3 cents for April delivery at midday, which could signal some bargain buying is occurring. But the market will need to see proof of this before adding long positions.

 

Wheat futures remain 20-plus cents lower in Chicago and Kansas City, while Minneapolis wheat is around 10 cents lower.

  • Broad risk aversion across the commodity sector is weighing on wheat futures this morning.
  • Traders are ignoring USDA's announcement China purchased 480,000 MT of SRW wheat for 2013-14, as this business is already factored into prices.
  • Traders appear unconcerned about the likelihood that this afternoon's crop condition update will reflect some of the damage from last week's freeze event in major HRW production regions.
  • Weekly wheat export inspections fell just short of expectations at 23.476 million bu., which is down nearly 5 million bu. from last week.

 

Live cattle futures have softened to trade moderately to sharply lower, while feeder cattle are sharply lower across the board.

  • Traders have extended the discount nearby live cattle contracts hold to last week's cash cattle trade at $127 on the Southern Plains, signaling attitudes toward beef demand and the cash market are bearish over the near-term.
  • This morning, Choice and Select boxed beef values fell 6 and 34 cents, respectively, and movement was light at 88 loads.
  • A chilly start to spring and a weak U.S. economy have limited the normal seasonal rally in meat demand as consumers wait to fire up the grill. The forecast calls for more of the same over the next five days.
  • Also,disappointing Chinese GDP and production data has stirred concerns about global economic headwinds.
  • Pressure also stems from some technical selling as live and feeder cattle contracts moved through key levels of support this morning.

 

Lean hog futures are posting slight losses in all but the June contract, which is sharply lower on technical-based selling.

  • Packers are paying steady to lower prices for market-ready hogs today as most are well supplied for near-term needs and they are working to improve negative cutting margins.
  • Product market concerns are also weighing on the market. This morning, the pork cutout value rose 74 cents, but movement was relatively light at 199.4 loads.
  • Pressure also stems from the steep premium nearby contracts hold to the cash hog index.
  • Also, traders are removing risk to start the week after Chinese economic data came in below expectations. The stock market and commodities are under sharp pressure to start the week.
     
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