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

March 17, 2014 07:11 AM

Corn futures are posting losses around 2 to 5 cents in most contracts at midday.

  • The market continues to see light profit-taking amid ideas Crimea's vote to secede from Ukraine is already factored into prices. Now traders are waiting to see what impact, if any, this has on grain trade.
  • UCAB say this could result in a 11-MMT reduction in grain harvest due to a major pullback in sowings stemming from a lack of funds related to the crisis.
  • Gains in the soybean market and a weaker U.S. dollar index are keeping losses from expanding.
  • The market's downside is also being limited by USDA's announcement Mexico bought 107,400 MT of U.S. old-crop corn this morning and a solid showing in today's export inspections data.
  • Corn export inspections of 976,742 MT the week ended March 13 came in near the upper end of the pre-report guess range.


Soybean futures are 3 to 5 cents higher in old-crop contracts while new-crop futures are mixed with an upside bias.

  • Traders are back to engaging in some bull spreading activity amid reminders of still-strong demand for U.S. soy products.
  • USDA's soybean export inspections of 939,738 MT the week ended March 13 nearly aligned with the top end of pre-report expectations.
  • Also, this morning, USDA announced a 110,000 MT U.S. soymeal sale to an unknown destination for 2014-15 delivery.
  • In addition, NOPA members report soybean crush in February fell to 141.612 million bu., which was on the friendly side of pre-report expectations and well above last year's tally.
  • Weakness in the U.S. dollar index makes U.S. soybean prices more attractive globally.


SRW wheat futures are trading around 6 to 9 cents lower. HRW wheat 5 to 6 cents lower and HRS wheat is posting losses around 5 to 7 cents.

  • Ideas the upside was overdone preceding the weekend vote in which Crimea's people overwhelming supported leaving Ukraine and joining Russia is pressuring wheat futures today.
  • While Ukraine is the world's No. 5 wheat exporter, shipments thus far have been uninterrupted and the Crimean region is not a major contributor to the nation's grain crop.
  • However, UCAB says the nation's 2014 spring grain sowings will drop significantly due to a funding shortage stemming from the turmoil.
  • Export inspections the week ended March 13 of 496,396 MT were up from the week prior and within pre-report expectations.
  • The overall tally fails to reflect a major uptick in demand traders had hoped might stem from unrest in Ukraine and shipping disruptions in Canada.
  • Drought across the Central and Southern Plains remains a source of underlying support.


Live cattle futures are narrowly mixed while feeder cattle futures are slightly higher in most contracts.

  • Live cattle futures are choppy as traders even positions following last week's steady to higher cash cattle trade at mostly $148 in the Southern Plains and $150 to $152 in Nebraska. The front-month is around $3 below the low end of that range.
  • Selling interest is being limited by another $2.20 surge in Choice boxed beef values this morning, though Select softened 93 cents and movement was quite light at 46 loads.
  • A major pullback in movement and recent choppy price action for the product market signals retailer resistance to record-high prices.
  • Sharp to limit-higher trade in the lean hog market along with favorable outside markets add support to live cattle.
  • Feeder cattle futures are also benefiting from softer corn prices today.


Lean hog futures have extended early gains to trade sharply to limit higher through the August contract at midday.

  • Technicals continue to favor market bulls and the front-month's gap higher start and move through psychological resistance at $120 is encouraging additional technical buys.
  • Few are willing to stand in the way of the impressive hog rally that has gone well beyond levels most anticipated, defying the need for a time or price correction, according to the Relative Strength Index.
  • Fundamental support stems from renewed concerns about the porcine epidemic diarrhea virus (PEDV). Due to the disease, Smithfield Foods has halted Friday kills at its Tar Heel, North Carolina, plant. Reuters cites cash sources as saying other plants owned by Hormel Foods Corp., JBS Swift and Triumph Foods may trim hours soon.
  • In addition, packers are again paying steady to higher cash prices. Strong profit margins make them willing to pay up for tightening supplies.
  • Wholesale pork prices have climbed to record highs on the tailcoats of the beef market, as pork prices are a value relative to beef. This morning, the pork cutout value firmed 17 cents, but movement was light at 128.14 loads.
  • But recent signs the beef market may be working on a top could lead to a pullback in pork prices, too.
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