Market Snapshot, Noon CT (VIP) -- January 28, 2014

January 28, 2014 05:59 AM

Corn futures are mixed with the front two contracts marginally higher and deferred contracts fractionally to 1 cent lower.

  • Bull spreading continues as the main activity today in very narrow trading.
  • A stronger U.S. dollar index is providing light pressure.
  • But light support for old-crop futures is coming from news Spain bought 110,000 MT of corn for 2013-14 delivery.
  • Gulf corn basis is steady in midday trading after showing a 1-cent gain in early morning trading. This has some traders looking for more demand news in the near future.
  • While futures continue to show some signs of working on a bottom, the fundamentals are bearish, which will keep a limit on rallies.


Soybean futures continue to trade mixed with old-crop futures down 3 to 5 cents and new-crop futures 1 to 2 cents higher.

  • Trading is light and primarily focused on unwinding of bull spreads today, as news is lacking.
  • Front-month contracts are lower on continuing trader concerns China will cancel U.S. soybean orders as a record-large Brazilian crop comes to market, which is just around the corner.
  • Brazilian sources indicate they expect record-large shipments out of Brazil in February.
  • News Gulf basis slipped 5 cents for immediate delivery this morning added to concerns. Gulf basis is steady at midday.
  • Also, news Hong Kong has suspended live poultry imports from mainland China for 21 days due to the finding of H7N9 bird flu keeps concerns about reduced feed demand close at hand.


SRW wheat futures are 1 to 2 cents higher and HRW wheat is up 1 to 3 cents. But HRS wheat is fractionally to 1 cent lower.

  • Wheat futures gained early light support on concerns over winterkill, but a stronger U.S. dollar index is trimming gains.
  • Temps are at sub-zero levels as far south as Nebraska and cold conditions persist all the day down to the Southern Plains. Snow is falling in the Central and Southern Plains. USDA says this is the third time the crop has been subjected to a cold snap this year.
  • However, trader concerns remain muted as damage cannot be assessed until the crop comes out of dormancy and USDA resumes its crop conditions. That is not until April.
  • However, weekly data from Texas indicates that state's crop saw another drop in its condition ratings last week.
  • The market is finding support from news Egypt, a value buyer, bought 60,000 MT of U.S. SRW wheat today. The country also purchased 180,000 MT of Russian wheat.
  • Gulf basis for SRW is steady at midday after jumping 1 to 5 cents for April through June delivery this morning.


Live and feeder cattle futures are slightly weaker after a mixed start.

  • Traders are becoming increasing concerned both wholesale and cash cattle prices could be forming a top and are evening positions as a result.
  • But the wholesale market continues to move higher. Choice boxed beef is up 98 cents while Select is up 7 cents in morning trading. Movement, however, is a slow 53 loads.
  • Showlist estimates show rising available supplies, but the intense cold on the Plains and Midwest is stressing cattle and reducing weight gains.
  • Trade sources indicate about 750 head traded at $146 in Texas yesterday, but active trade is not expected until late-week.
  • The February contract continues to trade at a $4-plus discount to last week's $147 cash trade on the Southern Plains. This suggests traders do not expect cash market strength to last. However, this was also the case in recent weeks when the cash market surged.
  • Feeder cattle futures are weaker on the setback in live cattle futures and Friday's bearish calf inventory data.


Nearby lean hogs continue to post moderate losses, while deferred contracts are narrowly mixed.

  • Lean hog futures continue to face light profit-taking after yesterday's high-range close in most contracts.
  • The cash market continues to balance reduced hog supplies due to producer unwillingness to move hogs in the frigid temps versus packers reducing kill hours due to tough transportation conditions.
  • Packers continue to enjoy strong profit margins, which tends to support cash prices.
  • The wholesale market continues to cooperate, with the pork cutout value rising $1.36 this morning. However, movement is an unimpressive 160.62 loads.
  • Supporting futures are ideas record-high beef prices will boost pork demand once retailers begin passing these record-high beef prices on to consumers in February.
  • The February contract continues to hold a $4 premium to the cash hog index, which limits buying interest in the front-month contract.
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