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

February 15, 2013 06:04 AM
 

Corn futures are narrowly mixed, with pressure limited by short-covering.

  • Corn futures continue to benefit from some light short-covering ahead of the weekend.
  • Recent signs export demand may be improving slightly are encouraging to that end. Gulf basis levels have improved lately and yesterday's weekly export sales tallies were an improvement over recent weeks.
  • However, upside potential is limited as any improvement will be slight. Corn demand is not expected to improve notably over the near-term, especially as South America is expected to produce a large corn crop.
  • Rain in the five-day forecast for Argentina and southern Brazil means production concerns are no longer a source of support.
  • Some forecasters' predictions that atmospheric conditions may be setting the Midwest up for another year of drought is also providing light support with spring around the corner.

 

Soybean futures are roughly 1 to 2 cents higher in old-crop futures while new-crop futures are choppy ahead of midday.

  • Traders are working to even positions ahead of what will be an extended break from the markets due to Presidents Day.
  • NOPA crush data has led some to favor profit-taking, however. NOPA members reported a decline in soybean crush from last month to 158.195 million bu., whereas pre-report trade expectations were for an increase in the January soybean crush to 160.6 million bushels.
  • USDA's announcement that unknown destinations had canceled 250,000 MT in soybean orders for 2012-13 is also limiting buying interest as it it reminds the market demand for U.S. beans will likely fade as South American supplies come available.
  • Light pressure also stems from rain in the near-term forecast for both Argentina and southern Brazil.
  • Steady Gulf basis and mixed outside markets provide little direction.

 

Wheat futures have trimmed early gains to trade steady to 4 cents higher in Chicago, mixed in Kansas City and fractionally to 3 cents higher in Minneapolis.

  • Wheat futures continue to benefit from recent signs U.S. prices have reached prices that are finally attracting export demand.
  • Weekly wheat export sales topped expectations yesterday and the market today learned that Brazil purchased 100,000 MT of U.S. HRW wheat and Japan purchased 61,568 MT of U.S. wheat.
  • But early gains have given way to some light profit-taking.
  • Also, rain in the extended forecast for wheat has also encouraged light profit-taking, though the five-day forecast remains mostly dry for the Southern and Central Plains.

 

Live cattle futures have reversed course to post slight to moderate gains. Feeder cattle futures to post slight to moderate gains.

  • Ideas live and feeder cattle futures have put in a low this week and are in need of a correction are boosting cattle futures to wrap up the week.
  • Traders expect the cash cattle market to also improve going forward as supplies tighten.
  • Yesterday, additional cash cattle sales took place at mostly $123 on the Southern and Central Plains, but traders are not concerned about narrowing the premium nearby futures hold to the cash market.
  • The boxed beef market was again choppy this morning with Choice cuts down 70 cents and Select values up $1.11. Movement was relatively light at 79 loads.
  • Until the boxed beef market gives signs it has put in a low, upside potential will remain limited to short-covering.
  • Feeder cattle traders are benefiting from ideas the downside has been overdone and a pullback in the corn market.

 

Lean hog futures are posting slight losses across the board today.

  • Demand concerns are setting the tone as traders even positions for the weekend.
  • Packer profit margins remain buried in the red as the pork cutout market continues to struggle to put in a low. Yesterday, the pork cutout value did improve 14 cents, however.
  • But considering the market's struggle to string together consecutive days of gains, much more improvement will be needed.
  • Thus, cash hog bids are steady to lower today.
  • Downside risk is also being limited by ideas pork demand will soon improve seasonally as retailers begin stocking up on hams for Easter.
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