Market Snapshot, Noon CT (VIP) -- February 3, 2014

February 3, 2014 06:07 AM

Corn futures are 2 to 3 cents higher in mostly technical-related trading.

  • Corn futures continue to trade higher in mostly technical-related trading as this morning's export inspections data has proven disappointing.
  • Corn futures are also benefiting from spillover buying from the soybean and wheat markets as well as a weaker U.S. dollar index.
  • Nearby contracts are seeing followthrough buying on last week's high-range close. March futures have moved to their highest level since early December. Futures are trading above resistance just above $4.35 and are testing resistance at the $4.40 area.
  • Early strength also came on news this morning of a 113,780-MT corn sale to unknown destinations for 2013-14 delivery.
  • But today's weekly export inspections report from USDA was somewhat disappointing as it came in below expectations at 21.644 million bushels. That is also down from last week's 29 million bushels.
  • Forecasts for snow to move across the Midwest this week is also viewed as supportive as that slows delivery to ethanol plants, processing plants, feed mills as well as the Gulf.
  • Others cite this view as a sign of a shift in trader attitudes, as difficult weather conditions existed earlier in January as prices slumped to new lows.
  • Gulf basis is steady at midday.


Soybean futures continue to record double-digit gains in the March through August contracts with deferreds mostly 3 to 7 cents higher.

  • A weaker U.S. dollar index coupled with strong soymeal prices continue to lift nearby soybean futures to start the week and the month.
  • The March contract has surged to its highest level since Jan. 21 and is testing resistance starting at $13.00.
  • Early support came from news USDA announced a 40,000 MT soyoil sale to unknown destinations for 2013-14 delivery.
  • Traders have backed off on concerns of Chinese order cancellations for the moment even as news Brazil has started shipping soybeans has been reported. The lack of order cancellations is viewed as a positive.
  • However, today's weekly export inspections figure came in at the low end of expectations at 45.435 million bushels. That is also down from last week's 73.974 million bushels. But traders seem to be brushing off that news as they reset positions for the start of a new calendar month.
  • Gulf soybean basis is unchanged in midday trading.


All three flavors of wheat futures continue to trade 2 to 5 cents higher.

  • The weaker U.S. dollar index and ideas the wheat futures may have found a low has wheat futures trading higher.
  • Economic jitters in currencies and equities has money flowing into Treasuries. But it also appears traders are moving funds into some commodities that appear to be a value buy.
  • Weather is starting to rise on traders' radars as they voice rising concerns about another cold blast in the Northern Plains this week. However, recent snows may be providing some protective cover with more snowfall expected.
  • Gains are being tempered by news Russia's government reports from July 1 through Jan. 26 it exported 17.327 MMT of grain, up 28.5% from the same period in 2012-13. The bulk of those exports has been wheat.
  • In addition, today's weekly export inspections figures came in below expectations at 11.653 million bushels. That is down from last week's 14.633 million bushels.
  • Gulf SRW and HRW wheat basis is steady in midday trading.


Nearby live cattle futures are more than $1.00 lower, with deferred contracts 50 to 85 cents lower. Feeder cattle futures are also marking moderate losses.

  • Cattle futures are lower on last week's $2 to $4 lower cash cattle in the Plains at $145 to $146. Volume was light, which could lead to heavier showlists this week.
  • The plunge in wholesale beef continues today with Choice boxed beef down $3.23 and Select down $5.28. Both Choice and Select beef have fallen more than $10 since Thursday. Movement improved to 86 loads.
  • With wholesale beef on the decline, packer profit margins have again slipped into the red, which will make them less willing to bid up for supplies. This could mean lower cash trade again this week.
  • Traders found little major news in Friday's Cattle Inventory Report that confirmed the U.S. cattle herd is the smallest in 63 years. However, the report showed the beef heifer replacement figure was lower than expected, which suggests herd rebuilding is a bit slower than expected.
  • Inclement weather in the Plains may restrict supplies this week.
  • Weaker live cattle futures and stronger corn futures are pressuring feeder cattle futures.


Lean hog futures are moderately to sharply lower, with the April contract leading declines.

  • Further weakness in the wholesale pork market is pressuring lean hog futures this morning.
  • Futures are also seeing spillover pressure from weakness in live cattle futures.
  • Traders are ignoring news the pork cutout value rose 64 cents after falling another $1.83 on Friday. Movement, however, is light at just 139.2 loads.
  • However, cash hog bids are generally steady to firmer as packers line up supplies ahead of this week's winter storm.
  • The cash hog index continues to improve, but it is still more than $3.00 under the February contract.
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