Market Snapshot, Noon CT (VIP) -- February 11, 2013

February 11, 2013 06:13 AM
 

Corn futures have softened to post losses of 3 to 7 cents.

  • Lackluster demand and spillover from soybeans continues to weigh on corn futures.
  • Weekly corn export inspections improved notably from last week to 14.463 million bu., which was within expectations.
  • USDA released its long-term ag projections today, which included its projection for corn production to recover to 14.435 billion bu. in 2013-14.
  • Plus, weekend rain in South America and more in the forecast for Southern Brazil is making it difficult for corn to find buyers.

 

Soybean futures have softened to post 20-plus cent losses through the August contract. New-crop contracts are mostly 12 to 16 cents lower.

  • Soybean futures are trading back near session lows as weekly export inspections came in below expectations and down 25.774 million bu. from the week prior at 30.153 million bushels.
  • This reminds traders that Chinese demand for U.S. soybeans will soon fade as South American supplies hit the market.
  • Prospects for a very large (record-setting) Brazilian soybean crop were boosted by rains in southern Brazil over the weekend with more in the forecast.
  • Plus, USDA's long-term projections call for U.S. soybean production to increase 364 million bu. from 2012-13 to 3.335 billion bushels.

 

Wheat futures have softened to post double-digit losses in Chicago while Kansas City and Minneapolis are down roughly 8 to 10 cents.

  • Spillover from corn and soybeans is keeping wheat under pressure as the market lacks the fundamentals to rally on its own.
  • Precip in the forecast for the Southern Plains adds to the negative tone.
  • While weekly export inspections of 22.452 million bu. were an improvement over the week prior, they were nothing to get excited about and within expectations.
  • USDA's long-term production projection is mildly supportive as it shows wheat production declining slightly in 2013-14 to 2.190 billion bushels.

 

Live cattle futures have moved to fresh session highs to trade slightly higher in most contracts. Feeder cattle futures are mixed, with nearby contracts slightly lower and the rest of the pit slightly to moderately higher.

  • Live cattle futures are benefiting from short-covering on ideas last week's losses were overdone. Pressure also eased on ideas the boxed beef market should be in the processing of putting in a seasonal low.
  • Boxed beef prices started the week mixed, with Choice up 27 cents and Select down 54 cents on strong morning movement of 90 loads.
  • Cash cattle trade took place at mostly $125 last week, which was steady to slightly lower than the week prior for most locations. Nearby futures remain at a premium to these prices, limiting buying interest.
  • Feeder cattle futures are mixed, with some short-covering in nearby contracts coming on weakness in the grain markets.

 

Lean hog futures remains mixed, with nearby contracts supported by short-covering.

  • The cash hog market is steady to $1 lower this morning as packers work to improve negative profit margins.
  • But nearby lean hog futures are being supported by the discount they hold to the cash index. February lean hogs are trading at a $3-plus discount to the cash index ahead of Thursday's noon CT expiration.
  • February lean hog futures briefly penetrated support at last week's low and recovered and are now testing initial resistance at Friday's high of $86.70.

     
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