Market Snapshot, Noon CT (VIP) -- April 24, 2014

April 24, 2014 07:07 AM
 

Corn futures are have trimmed earlier gains and are trading fractionally to 1 cent lower.

  • Corn futures are slightly weaker on light profit-taking after touching resistance at the $5.07 1/2 area on the May contract.
  • Futures had favored the upside on spillover strength from the wheat market but buying eased as prices neared the contract's highest close since Aug. 27.
  • However, the market is resting in a wide support zone pivoting on $5.00. Traders will remain positive toward corn as long as prices hold above that mark.
  • Weather patterns are not friendly toward crop planting with rains moving across the Corn Belt today and more expected later along chilly temps over the next 10 days.
  • Futures are finding support from this morning's Weekly Export Sales Report that reminds traders of strong export demand. Sales of 618,900 MT for 2013-14 and 382,900 MT for 2014-15 came in at the upper end of pre-report expectations.
  • Gulf corn basis bids are weaker this morning.

 

Old-crop soybeans are mixed, while new-crop beans are 2 to 4 cents higher.

  • Soybean futures are marking time as traders reassess potentially slowing Chinese demand and rising tensions in the Ukraine.
  • July futures are again testing support at $14.60 while finding resistance at $14.71, which matches the 14-day moving average.
  • New-crop futures were under pressure earlier on ideas potential corn planting delays may result in a rise in soybean plantings.
  • But unwinding of bull spreads has new crop futures on the plus side.
  • This morning's weekly export sales data reflected slowed demand, but this has long been anticipated. Soybean sales of 800 MT for 2013-14 were a marketing year low. Sales of 118,200 MT for 2014-15 were also lackluster. The combined tally came in below expectations.
  • This morning's acreage report from Statistics Canada revealed producers in the country plan to plant 19.8 million acres of canola this spring, which was well below expectations and down 0.7% from 2013. But Canadian farmers say they plan to plant a record 5.3 million acres of soybeans, up 16.5% from 2013.
  • A meeting between government officials and officials with the Argentine soy crushers union has been pushed back to noon today. Workers have been threatening to strike unless their demands for higher wages are met.
  • Lower export demand caused Gulf basis to slip 5 to 10 cents today.

 

Wheat futures are posting strong gains across all three flavors.

  • Rising tensions in Ukraine has wheat futures posting double-digit gains this morning.
  • SRW wheat futures are testing at $7.00 and have resumed an uptrending pattern this week after a brief dip below the 14- and 40-day moving averages.
  • HRS futures are higher on rising concerns on seeding delays due to the continuing rains and cool temperatures expected for the Northern Plains.
  • The market is finding support from this morning's Weekly Export Sales Report. Sales of 339,100 MT for 2013-14 and 271,700 MT for 2014-15 were within expectations.
  • Also supportive is this morning's Statistics Canada acreage report, as it revealed producers in the country plan to plant 24.8 million wheat acres, which came in slightly above expectations. If realized, the planting figure would be 4.8% smaller than year-ago.
  • The Drought Monitor reflected ongoing expansion of drought on the Plains.
  • Traders are brushing off the forecast for precip on the Central and Southern Plains this weekend, as this is also expected to be accompanied by severe weather.

 

Live cattle futures are choppy with nearbys favoring the upside. Feeder cattle futures are moderately higher.

  • Cash cattle traded at steady prices of $148 on the Northern Plains yesterday this week, which is providing some support to futures due to the discount the front-month contracts hold to the cash trade.
  • The wholesale beef market continues to provide positive news. Choice boxed beef is $1.42 higher this morning, while Select beef is $1.57 higher. Movement is a light 55 loads however.
  • The upturn in wholesale beef prices has trimmed packer cutout margins from losses exceeding $100 per head to losses of around $11 per head. With showlists estimated tighter in the Southern Plains but higher in Nebraska, traders are looking for steady trade at $146 in the Southern Plains once negotiations are completed.
  • Light support also stems from another week of strong export sales. The week ended April 17, weekly export sales of 18,000 MT were up 7% from the prior four-week average.
  • Bullish chart patterns continue to lift feeder cattle futures.

 

Lean hog futures are losing ground, posting losses slight to moderate losses with May leading the decline.

  • Profit-taking is dominating today's trade after yesterday's strong gains.
  • The front-month May contract is leading losses due to the nearly $5 premium it holds to the cash hog index.
  • Tuesday's bullish Cold Storage data, which indicates tightening supplies and/or solid pork demand, is trimming losses in deferred contracts.
  • This morning wholesale pork market has a mixed message for traders. The pork cutout is down only 6 cents but movement is a relatively light 148.33 loads.
  • The weekly pork export sales provided support as it showed an increase to 15,100 MT, an 83% jump from the prior four-week average.
  • Cash hog bids are mixed today, but packer butting margins are negative and declining.
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