Market Snapshot, Noon CT (VIP) -- January 17, 2014

January 17, 2014 06:10 AM

Corn futures continue to trade 3 to 4 cents lower, with front-month contracts leading declines.

  • Corn futures are lower on a stronger U.S. dollar index, a disappointing read on planting intentions and weekend position evening.
  • Informa Economics projects farmers intend to plant 93.319 million acres to corn this year based on its early January survey. The figure, if achieved, is down only 2.1% from last year's 95.365 million acres but 1.473 million acres higher than Informa's previous forecast.
  • Futures started on the negative as weather forecasts call for cooler temperatures and rain over Argentine next week. But high temps are expected for Brazil.
  • Traders continue to shrug off news China's cereal grain imports for calendar year 2013 totaled 15 MMT, which is up 1 MMT from 2012, according to the head of the country's state grain administration.
  • Instead they are focused on the the possibility of additional rejections or sales cancellations of U.S. corn or DDGs by China due to the presence of an unapproved GMO corn variety.
  • Traders are also ignoring USDA's announced sale of 204,000 MT of corn to value-buyer Egypt for 2013-14 this morning.
  • Gulf corn basis is unchanged at midday after being higher in early trading.


Soybean futures opened lower but have trimmed those losses and are now narrowly mixed.

  • Soybean futures opened lower on the forecast for cooler temps and precip in Argentina and a stronger U.S. dollar.
  • But futures found support on news Informa Economics lowered its 2014 planted soybean acreage estimate to 81.264 million acres based on an early January survey. This is down 665,000 acres from the firm's earlier forecast, but would be a 6.2% rise in planted acres versus last year's 76.533 million acres.
  • Concern over the confirmation of four additional cases of H7N9 bird flu in China pressured soybean futures in early trading. If a major outbreak occurs, it could slow feed demand.
  • Gulf soybean basis is unchanged at midday after falling 5 cents for immediate delivery and a penny for March delivery earlier this morning.


SRW wheat future continue to trade 6 to 7 cents lower, HRW wheat 3 to 4 cents lower and HRS wheat 3 to 6 cents lower.

  • The stronger U.S. dollar index coupled with losses in the corn market are pressing wheat futures lower.
  • Technical traders remain negative as chart patterns are heavily bearish.
  • The recent purchase of a few cargoes of U.S. wheat by value-buyer Egypt has given some traders hope prices may have finally found a level that stimulates demand. But consistent demand news is needed to trigger active buying interest from traders.
  • Traders continue to ignore drought worries in the Southern Plains and the vulnerable condition of the winter wheat crop, as most of it is exposed to the elements. Traders believe it is too early in the season to worry about yield impacts from weather.


Nearby live cattle futures have moved slightly higher after gapping lower on the open, while deferred months are slightly lower. Feeder cattle futures are slightly lower.

  • Profit-taking ahead of the weekend resulted in a gap-lower open in nearby futures, but these contracts have since moved higher and filled today's gap.
  • The wholesale beef market continues to provide positive news. Choice boxed beef rose $2.96 this morning to $231.75 per cwt; Select soared $3.44 to $228.95 per hundredweight. Movement is down somewhat at just 52 loads, however.
  • Cash cattle traded at record levels Wednesday. Texas and Kansas have seen cash trade mostly at $142, while Nebraska has seen cash prices ranging from $142 to $144.50.
  • Showlist estimates are tighter this week, plus frigid temps in recent weeks slowed or stopped weight gain, further tightening supplies.
  • Adding support to the market is the positive swing in packer profit margins which are above $50 compared with a $100-plus loss just last week.
  • Dollar strength and spillover from corn futures are pressuring feeder cattle futures.


Lean hog futures continue to trade slightly lower.

  • Lean hog futures continue to trade lower, but traders have trimmed losses on spillover support from live cattle.
  • The February lean hog contract is leading declines as it holds a $6 premium to the cash hog index; the index has declined the past three days.
  • The stronger U.S. dollar index today is also adding to today's negative tone.
  • Support is coming from the wholesale market, however. The pork cutout value improved 84 cents this morning on average movement of 194.73 loads.
  • Traders continue to look for pork to benefit from the record-setting boxed beef rally.
  • Cash hog bids are mostly steady.
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