Market Snapshot, Noon CT (VIP) -- March 10, 2014

March 10, 2014 07:19 AM

Corn futures are 8 to 11 cents lower through the July 2015 contract.

  • Corn futures are lower as the wave of USDA reports this morning failed to deliver notable bullish news.
  • Strength in the U.S. dollar index and spillover weakness from soybeans are also pressing corn prices lower.
  • USDA trimmed 2013-crop carryover projections to 1.456 billion bu., which is below the pre-report estimate of 1.487 billion bushels. The tally is still well above last year's 821 million bushels.
  • Traders are disappointed USDA left its projections for both the Argentine and Brazilian corn crops unchanged from previous reports. Traders had expected slight declines for both. USDA raise projected global carryover by 1.2 MMT.
  • USDA's weekly export inspections as of the week ending March 6 came within trade expectations at 933,974 MT. That figure was down 123,139 MT from the previous week.
  • Gulf basis is steady at midday for March through May and August delivery but 1 cent lower for June and July delivery.


Soybean futures are posting losses in the teens to 30s, with old-crop futures leading to the downside.

  • A stronger U.S. dollar, negative economic news from China and a set of USDA reports containing no bullish surprises has futures on the defensive.
  • Traders were disappointed USDA did not trim old-crop soybean carryover more than it did. Traders were looking for a cut of 9 million bu. from last month to 141 million bu., but USDA offered up a projection of 145 million bushels. This is down from the previous month's 150 million bushels.
  • Traders are also disappointed USDA not not trim its South American production pegs as much as expected. USDA lowered the Brazilian soybean drop to 88.5 MMT and left the Argentine crop unchanged at 54 MMT. Pre-report expectations called are for USDA to put the Brazil bean crop at 88.14 MMT and the Argentine crop at 53.5 MMT.
  • Also, a pullback in Chinese imports in February reminds that the nation's demand for U.S. beans typically slows in the months ahead.
  • China unexpectedly posted a trade deficit of $23 billion in February, whereas traders were expecting a trade surplus of $14.5 billion. But with inflation low, China has some flexibility to enact measures aimed at boosting economic growth.
  • Traders are shrugging off USDA's weekly exports inspections report which came in nearly double expectations at 1,505,206 MT. That was up 518,504 MT from the previous week.
  • Gulf soybean basis is unchanged at midday.


SRW wheat futures are 6 to 7 cents lower, with the exception of the front-month, which is 11 cents higher. HRW is 3 cents lower while HRS wheat is 5 to 6 cents lower.

  • Wheat futures are down on spillover from the downturn in corn and soybean futures.
  • Traders expected USDA to raise its old-crop wheat carryover estimate by around 10 million bu. from last month to 568 million bushels. But USDA left carryover unchanged.
  • Today's weekly export inspections report was disappointing at 429,081 MT. This was down 180,786 MT from the previous week and below expectations.
  • Wheat futures have benefited from shipping problems in Canada and tensions in the Ukraine, but those concerns have been set aside today in the general downswing in the grain complex.
  • Gulf HRW and SRW wheat basis are steady at midday.


Live cattle futures are narrowly mixed. Feeder cattle are moderately higher.

  • Cattle futures continue to trade in a very narrow range as traders wait on direction from this week's cash cattle trade. The April contract is finding some support from the nearly $5 gap the contract holds to last week's cash cattle prices in the Southern Plains.
  • Traders continue to look for signs the market may be near or has put in a top as boxed beef movement has slowed notably. It was a low 63 loads again this morning.
  • However, boxed beef prices continue to improve with Choice beef up $1.72 and Select up $1.95 today.
  • The rise in surging boxed beef prices coupled with lower cash cattle prices last week has sharply narrowed packer profit margins to $18.15 in the red versus negative $65.90 a week ago.
  • Lower corn prices have feeder cattle futures trading higher.


Lean hog futures continue to post new highs after gapping higher on the open. Futures are sharply higher with nearbys at or near their $3.00 limit.

  • April futures gapped above the previous contract high and continue to trade at highs for the day.
  • While technical traders note hog futures are seriously overbought, the steep unptrend line remains untested and the chart is bullish so long as the gap remains unfilled.
  • Cash hog prices are mostly $1 higher even as some plant have reduced kill hours due to the porcine epidemic diarrhea virus (PEDV) tightening market-ready hog supplies.
  • Ideas the disease will further cut supplies this spring and summer are lifting those contracts.
  • The pork cutout value jumped $1.23 this morning but movement is a slow 119.18.
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