Market Snapshot, Noon CT (VIP) -- February 11, 2014

February 11, 2014 06:00 AM

Corn futures continue to trade 2 to 4 cents lower.

  • Corn futures continue to trade lower on profit-taking and unwinding of spreads versus soybean futures.
  • The push lower penetrated nearby support and triggered additional sell stops. But buying appeared after the initial wave of selling failed to attract followthrough sales.
  • The market is ignoring today's slight weakness in the U.S. dollar index.
  • Traders have shrugged off yesterday's friendly Supply & Demand (S&D) Report in which USDA cut its corn carryover estimate by 150 million bushels. Carryover supplies are still expected to be 80% higher than a year earlier.
  • Brazil's crop-estimating agency, Conab, trimmed its corn crop estimate from 78.97 MMT to 75.47 MMT due to a smaller safrinha (second crop) estimate. But Conab's forecast remains well above other crop estimates, including USDA's, which sits at 70.0 MMT.
  • Gulf corn basis is a penny lower for March delivery and 2 cents weaker for June delivery at midday. Basis is steady for other delivery periods.


Soybean futures continue to trade 2 to 5 cents higher, with March futures leading gains.

  • Soybean futures moved higher after opening weaker and continue to hang onto gains.
  • Today's announcement from USDA that China purchased 116,000 MT of U.S. soybeans for 2014-15 delivery prompted the reversal in today's trading.
  • A weaker U.S. dollar index is also contributing to today's gains as well as unwinding of corn versus soybean spreads.
  • Limiting gains are improved odds for precipitation for southern Brazil.
  • Conab trimmed its Brazilian soybean crop peg from 90.31 MMT to 90.01 MMT, but this still represents a large crop. Conab did note that hot, dry weather in southern Brazil could affect its estimates next month, however.
  • USDA yesterday raised its Brazilian soybean crop estimate to 90.0 MMT.
  • Gulf soybean basis is steady at midday for all delivery periods with the exception of the March delivery period, which is one cent lower.


Wheat futures are in positive territory with SRW up 1 to 5 cents, while HRW and HRS are 6 to 10 cents higher.

  • Continuing arctic temps in the Plains and ongoing transportation issues in Canada have HRW and HRS futures moving higher.
  • Weakness in corn futures is dampening gains in SRW wheat futures.
  • The weaker U.S. dollar index is providing support across all three flavors of wheat.
  • While HRW contracts are higher on current cold temps in the Plains, some traders are looking ahead to forecasts calling for temperatures to moderate in the days ahead.
  • Traders continue to react favorably to yesterday's steeper-than-expected cut to 2013-14 U.S. wheat carryover by USDA.
  • However, the Australian Bureau of Agriculture Resource Economics and Sciences (ABARES) raised its 2013-14 Australian wheat crop peg from 26.213 MMT to 27.013 MMT due to strong production in Western Australia. This is above USDA's current peg of 26.5 MMT.
  • Gulf HRW and SRW wheat basis is steady in midday trading.


Live cattle futures are moderately to sharply higher with April futures up $1.30-plus. Feeder cattle futures are posting similar gains.

  • Live cattle futures are higher as traders look for a low in wholesale beef and cash prices.
  • Nearby contracts are trading at the high range of last week's $140 to $142 cash price range.
  • The boxed beef market gave some tentative signs it may be working on a low yesterday, but Choice boxed beef values fell $1.14 this morning while Select beef rose 16 cents. Movement is decent at 82 loads.
  • Packers continue to cut in the red and showlist supplies are seen as higher this week, which has some believing packers will lower their bids this week. Feedlots continue to struggle with the intense cold, which has operators resisting the lower bids.
  • Feeder cattle futures are higher on lower corn prices, weaker U.S. dollar index and higher live cattle futures.


Lean hog futures are steady to slightly lower through the August contract and slightly higher in far-deferred contracts.

  • The front-month futures contract is slightly lower due the premium it continues to carry to the cash hogs index. The February contract expires Friday. The April contract has a $10 premium to the index.
  • Early cash hog bids are mostly steady as movement is slow in parts of the Midwest due to cold temps.
  • The pork cutout margin fell 40 cents this morning on average movement of 178.65 loads.
  • Traders are looking for the product market to move seasonally higher on Easter ham buying and consumer resistance to record-high beef prices.
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