Market Snapshot, Noon CT (VIP) -- February 6, 2014

February 6, 2014 06:06 AM

Corn futures have softened to trade steady to lower in most contracts.

  • Corn futures have trimmed early gains on profit-taking after March futures moved to their highest level since Nov. 12 and tested resistance at the November highs near $4.50.
  • Despite the setback, March futures are finding support at the December highs near $4.40, which served as resistance until this week.
  • Future moved higher in early trading as today's weekly export sales data showed recent price gains have yet to slow demand.
  • Total sales of more than 1.7 MMT for 2013-14 were well above expectations. However, USDA reported China canceled 220,000 MT of old-crop corn buys this morning, but this was not unexpected.
  • Corn export commitments for 2013-14 are running 145% ahead of year-ago, whereas USDA projects exports for the 2013-14 marketing year will exceed year-ago by 98.4%.
  • A weaker U.S. dollar index and spillover strength from soybeans are also adding support.


Old-crop soybean futures continue to trade higher with double-digit gains, while new crop are 5 to 6 cents higher.

  • Soybean futures moved higher on technical strength, a weaker U.S. dollar index and positive export news.
  • March futures pushed above their January high in early trading, moving to their highest level since Dec. 23. But futures settled back on profit taking, found support at the $13.20 area, which had previous served as resistance, and have moved higher once again.
  • Support also stems from USDA's weekly export sales report, which showed export sales of 577,000 MT for 2013-14 and 219,500 MT for 2014-15. The totals were near the upper end of pre-report expectations. Exports were also strong at more than 1.508 MMT.
  • Traders remain be concerned about Chinese cancellations and today's report did include decreases of 530,500 MT by unknown destinations. However, traders' concerns about this possibility are reduced because China was the lead buyer of old-crop beans.
  • In addition, soymeal sales were highly impressive the week ended Jan. 30.
  • The market also remains mildly concerned about heat and dryness in some areas of Brazil, although this is a boon in terms of getting the bean cropped shipped.


SRW wheat is 2 to 3 cents lower. HRW wheat is around a penny higher in most contracts. HRS wheat is 10 cents higher in the front-month with deferreds narrowly mixed.

  • SRW wheat futures are lower on mild profit-taking after recent gains. Meanwhile HRW and HRS are seeing some support from crop concerns.
  • Futures are finding support from today's positive weekly wheat export sales of 638,800 MT for 2013-14 and 94,800 MT for 2014-15. These figures came in near the upper end of pre-report expectations and reflect solid demand.
  • Nearby HRS futures are finding support from news Canadian shipping delays have forced Japan to increase its purchases of U.S. wheat.
  • Light support also stems from news USDA's ag attaché in Canada expects total production of wheat, barley, oats and corn to fall 20% in 2014 from last year's record crop to 52 MMT.
  • An expansion of drought for much of winter wheat country keeps recently reported crop deterioration in mind.
  • A weaker U.S. dollar index and gains in soybeans are also supportive.


Live cattle futures are mostly slightly to moderately weaker with February leading declines. Feeder cattle futures are weaker as well.

  • Live cattle futures initially benefited from an uptick in beef movement yesterday, though this came on a big decline in wholesale prices. If movement remains strong, that will build ideas beef prices have fallen far enough to revive demand.
  • But selling picked up following this morning's beef market update. It shows Choice boxed beef down $2.27 and Select beef down $1.83. Movement is a reduced 69 loads.
  • Limiting selling pressure in nearby futures is the discount that exits to the $140 to $141 cash prices expected this week. Last week, trade took place at $144 to $145.
  • The continuing stressful weather is resulting in reduced showlists, which have some feedlots asking for steady prices, however.
  • However, packer profit margins are back in the red, which limits their willingness to bid higher for supplies.
  • The upward swing in corn prices this week is weighing on feeder cattle futures.


Lean hog futures are split with nearby contracts slightly to moderately lower and July and later futures posting similar gains.

  • Expectations supplies will be restricted remainder of this week due to difficult winter weather has cash hog bids steady to firmer. Packers continue to cut in the black, which also provides support.
  • Deferred futures are seeing some light support on concerns of the porcine epidemic diarrhea virus (PEDV) reducing supplies later this year.
  • Pressing nearby futures is the setback in the pork cutout value this morning. The cutout is down 67 cents while movement is an average 162.53 loads.
  • Futures are finding some support from today's weaker U.S. dollar index.
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