Market Snapshot, Noon CT (VIP) -- January 2, 2014

January 2, 2014 06:06 AM

Corn futures are 1 to 2 cents lower at midday.

  • The corn market saw short-covering for much of the morning, with some traders noting spreading activity is in play versus soybeans. But this has given way to some light profit-taking.
  • Just minor losses in the corn market are impressive with the soybean market selling off and in the face of strong gains in the U.S. dollar index, which has some traders thinking the lows in corn may be in.
  • The market is also holding up well considering showers and a moderation in temperatures for Argentina, easing drought concerns for that country's corn crop.
  • Gulf basis is steady at midday after starting the days 1 cent stronger for January through March delivery.


Soybean futures are notching new lows ahead of midday with January through July futures 25 to 30 cents lower and deferred months 5 to 19 cents lower.

  • Rains in Argentina and northern Brazil have soybean futures on the defensive today.
  • Traders are again focusing on prospects of a record-large harvest from South America as a result.
  • With the South American harvest just around the corner, traders also worry China may cancel some U.S. soybean purchases as those supplies become available.
  • Today's decline saw January soybeans punch through key support at $13.00, triggering sell stops. The technical picture has turned decidedly bearish as a result.
  • Adding to the selling pressure is rebalancing by funds to start 2014.
  • Sharp gains in the U.S. dollar index are adding to already negative market attitudes.
  • Gulf soybean basis is steady at midday.


Nearby wheat futures have extended early losses and are now 7 to 10 cents lower for all three flavors this morning.

  • Strong gains in the U.S. dollar index is the major negative in the market today as increases in the value of the dollar make U.S. wheat less competitive globally.
  • Also, traders are looking for tomorrow's Weekly Export Sales Report to confirm slow demand, especially since it will cover demand during the Christmas holiday.
  • Traders are not concerned about bitter cold in northern areas of winter wheat country as a thin layer of snow protects much of the crop.
  • The March SRW wheat contract is testing key support at $6.00 with recent trades 2 to 3 cents under that mark.


Live and feeder cattle futures continue to post slight to moderate gains this morning.

  • Continuing strength in wholesale prices and bullish expectations for cash prices have live cattle futures on the plus side this morning.
  • Choice boxed beef values rose another 29 cents this morning to $200.94 per cwt. while Select increased 24 cents to $196.65 per cwt. -- another record high for the cut. However, movement is light at 44 loads.
  • Feedlots are asking $135 to $137 for cash cattle due to the stronger wholesale market and reduced supplies due to the intense cold.
  • Showlist estimates are higher from a week earlier. But traders look for supplies to tighten going forward due to the stoppage of Zilmax sales and lower feed prices encouraging producers to retain cattle to rebuild their herds.
  • Feeder cattle futures are higher on expectations of tightening supplies to start 2014.


Lean hog futures gapped higher on the open and have strengthened to post moderate to sharp gains in the lead contracts.

  • Short-covering continues to dominate trading today as the failure to followthrough on Monday's bearish reversal failed to attract additional selling. This has traders thinking the downside has been overdone in recent sessions.
  • Gains in the product market added to the positive tone early but the wholesale market turned down today. The pork cutout value fell $1.71 in morning trading on moderate movement of 203.75 loads.
  • The ability of futures to hold gains in the face of weakening wholesale prices adds to ideas the downside has been overdone.
  • Cash hog bids are mostly steady with a few higher bids. Packers are planning a smaller Saturday kill than the week prior, but bitterly cold temps across the upper Midwest make producers unwilling to market hogs.
  • Average hog weights in Iowa and southern Minnesota for the week ended Dec. 28 rose 1.7 pounds. However, the head count slid by 114,000 from the week prior.
  • Today's strength has boosted the wide premium February lean hogs hold to the cash index to $7.
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