Market Snapshot, Noon CT (VIP) -- March 15, 2013

March 15, 2013 06:56 AM

Corn futures have seen choppy trade, but most contracts are currently steady to around a penny lower.

  • The corn market has seen short-covering at times today. A lack of fresh news means traders are focused on position evening ahead of the weekend.
  • The market is weighing signs of slight improvement in export demand for U.S. corn against recent signals end-users are seeking alternatives to U.S. Corn
  • Softening Gulf basis levels of late speak to end-users turning to products such as sorghum or wheat over corn.
  • A reminder of expectations for a rebound in corn production in 2013-14 is also limiting buying interest. Allendale forecasts corn plantings of 96.956 million acres with an average yield of 156.97 bu. per acre for a 13.912 billion bu. crop.
  • The detection of high levels of aflatoxin in central European grain along with dollar weakness is limiting pressure.


Soybean futures have softened to post losses of 6 to 9 cents in old-crop beans, while new crop beans are mixed with a downside bias.

  • Expectations the availability of South American bean supplies will soon slow demand for U.S. soy prices continues to weigh on the bean market.
  • Reports that soybeans at Brazil's Port of Paranagua moved to a discount to Chicago prices for the first time adds to such ideas.
  • Disappointing soy crush data adds pressure. NOPA members report soybean crush totaled 136.322 million bu. for February, which was a 21.9-million-bu. decline in crush from last month. Pre-report expectations were for crush of 142.4 million bu. last month.
  • Pressure on new-crop futures is being limited by news China purchased 165,000 MT of soybeans for 2013-14 today.
  • Countering this, however, is a reminder that U.S. soybean production is expected to rebound this year. Allendale forecasts record-large bean plantings of 78.324 million acres with an average yield of 43.35 bu. per acre for a 3.349 billion bu. 2013 crop.


Wheat futures have pared losses to trade fractionally to 4 cents lower.

  • Wheat continues to take its cue from the corn market. As short-covering picked up in corn, wheat futures pared losses and briefly moved into positive territory in Chicago.
  • Bears maintain a slight upper hand thanks to a reminder that despite drought across the Central and Southern Plains, 2013-14 supplies are expected to be sufficient.
  • Allendale projects U.S. wheat plantings of 56.261 million acres with a trendline yield of 45.2 bu. per acre. This would result in a 2.204 billion bu. Crop, which is down slightly from 2012-13's 2.269 billion all wheat crop.
  • Drought in winter wheat country along with warm temps and just limited precip in the forecast is limiting selling interest to profit-taking.
  • News SovEcon raised its production forecast for Russia's grain crop to 84 MMT to 89 MMT from its previous estimate of 80 MMT to 87 MMT is also limiting pressure.


Live and feeder cattle futures have softened to post sharp losses ahead of midday.

  • Cash cattle sales have picked up in the Texas, Kansas and Nebraska at $127, which is down a buck from last week. Futures softened in reaction to this as expectations were for at least steady prices this week.
  • A stirring of concerns about beef demand was largely to blame for lower cash prices.
  • Boxed beef prices continued their run-up the first half of the week, but movement was consistently light. Then prices slipped yesterday and failed to spur stronger movement.
  • The same can be said of this morning's boxed beef action; Choice values fell 40 cents and Select cuts declined 93 cents. Movement was a pitiful 50 loads.
  • Feeder cattle futures are facing spillover pressure from live cattle and lean hogs as well as some technical pressure as some months hit new contract lows again today.


Lean hog futures have softened to post moderate to sharp losses ahead of midday.

  • Spillover from live cattle and product market unease continues to weigh on lean hogs.
  • Market-ready hog supplies are ample and most packers are bought ahead on near-term needs. Plus, some have reduced their slaughters slightly amid demand concerns. Therefore, traders are not optimistic about a reverse in direction in the immediate future.
  • The pork cutout value slid another 90-cents yesterday, signaling the product market has yet to put in a low.
  • This eroded packer profit margins. Thus, they are paying steady to lower prices for cash hogs to wrap up the week -- in line with the weekly trend.
  • Light pressure also stems from the nearly $2.50 discount the April contract holds to the cash hog index.
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