Market Snapshot, Noon CT (VIP) -- March 26, 2013

March 26, 2013 07:02 AM

Corn futures continue to post slight losses ranging mostly 1 to 3 cents.

  • Pre-report positioning for USDA's Thursday reports remains the dominant action in the corn market.
  • While traders anticipate USDA will peg quarterly corn stocks at their lowest level in 15 years, they also expect it to peg seedings at the highest level since 1936.
  • Plus, the pre-report expectation number of 97.3 million acres planted is light relative to what most market participates discussed throughout the winter.
  • Talk of Argentine corn exports are weighing on the market as well.


Soybean futures have firmed to trade 7 to 9 cents higher in old-crop futures and around 5 cents higher in new-crop beans.

  • Fresh news is lacking, leaving traders to square positions before the release of USDA's acreage and stocks data Thursday.
  • Traders are also unwinding long-corn, short soybean spreads ahead of the report.
  • The market expects USDA to peg soybean plantings at a record-large 78.5 million acres, which would be up 1.3 million acres from 2012 seedings. There is also some speculation a delayed start to planting could encourage some to shift acres from corn to beans.
  • Traders look for soybean stocks as of March 1 to be down around 427 million bu. from year-ago at 947 million bushels.
  • Uncertainty persists about Brazil's shipping delays and when its record-large crop will come available. Gulf basis slid this morning, possibly signaling a slowdown in demand for U.S. exports.
  • In contrast, a Chinese ag consultant group recently said it expects portside soybean inventories there to decline to around 4 MMT by the end of March due to these delays.


Wheat futures are mostly slightly lower in Chicago, while Kansas City and Minneapolis wheat are enjoying slight gains.

  • Chicago wheat futures are facing spillover pressure from corn.
  • Other locations are seeing light support from concerns about sub-freezing temps the past two nights on the Plains could cause some damage to the winter wheat crop. This is especially true in Texas and Oklahoma where much of the crop is jointing.
  • Otherwise, traders are working to ready positions for USDA's acreage and stocks data Thursday. Traders expect USDA to peg all wheat plantings at 56.4 million acres, up 700,000 acres from last year.
  • Meanwhile, the quarterly stocks data is expected to show wheat stocks as of March 1 at 1.167 billion bu., which would be down 32 million bu. from year-ago.


Live cattle futures have softened to post slight losses in all but the June contract, which is slightly higher. Feeder cattle futures remain split, with nearbys slightly higher and deferred months under pressure.

  • Traders are booking profits amid concerns about lackluster boxed beef demand and the very limited reaction yesterday to Friday's bullish Cattle on Feed Report.
  • A seasonal uptick in grilling demand is thought to be delayed by persistent cold temps and wintry weather.
  • This morning Choice cuts fell 8 cents and Select declined $1.11. But the softer prices did encourage strong movement of 112 loads.
  • But selling interest remains limited by tightening supply prospects. Friday's Cattle on Feed Report showed feedlots are current and feeder calf supplies are tightening.
  • Showlist estimates this week are estimated to be lighter at all locations and down 25,000 head overall from last week.
  • This should help feedlots to get at least steady cash prices, relative to week-ago. Some plants are closed Friday or Monday for the Easter holiday, however, which adds some uncertainty.
  • Nearby feeder cattle futures are enjoying light short-covering on weaker corn prices.


Lean hog futures are still enjoying moderate gains, with nearbys leading to the upside.

  • Lean hog futures are benefiting from unexpected strength in the cash hog market. Bids are mixed today.
  • This is indicative of ideas the pork and cash market are working on seasonal lows. The market believes that as temps warm up, consumers will opt to grill more economical pork over beef in light of recent tax hikes and lofty gas prices.
  • Yesterday, the pork cutout value rose 68 cents, but movement was very light.
  • Traders are also beginning to ready positions for USDA's Quarterly Hogs & Pigs Report Thursday. Pre-report expectations are for a 0.7% increase in the all hogs and pigs crop over year-ago as of March 1 to 65.390 million head. All animals kept for breeding are expected to rise 0.3% over last year for a breeding herd of 5.897 million head.
  • Also signaling the market anticipates a seasonal low is near, traders are widening the $5-plus premium April lean hogs hold to the cash hog index.
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