Market Snapshot, Noon CT (VIP) -- March 26, 2014

March 26, 2014 07:05 AM
 

Corn futures are 2 to 4 cents lower.

  • Corn futures are lower on profit-taking, spillover from losses in wheat futures and a stronger dollar.
  • With little news available, traders are focusing on evening positions ahead of USDA's Prospective Plantings and Quarterly Grain Stocks Reports next Monday.
  • March 1 corn planting intentions are expected to come in around 92.748 million acres. If achieved, this would be down 2.6 million acres from year-ago, but up 748,000 acres from USDA's projection at its Outlook Forum.
  • The Grain Stocks Report has a history of surprising the market. Traders expect stocks to come in around 7.099 billion bu., up from 5.4 billion bu. last year.
  • The forecast for warmer Midwest temps is providing some pressure as it reduces concerns about late planting.
  • However, selling is being limited by news Lanworth expects planting delays to trim U.S. corn plantings slightly to 91.6 million acres. It also expects March 1 corn stocks to come in between 6.999 billion bu. and 7.376 billion bushels. It says the wide range is due to "unprecedented extremes in corn feed and residual use."
  • Weekly ethanol production fell 6,000 barrels per day (bpd) to 885,000 bpd the week ended March 21. Ethanol stocks rose 376,000 barrels to 15.65 million barrels.
  • Gulf basis is 5 cents firmer for immediate shipment in midday trading and steady for all other delivery periods.

 

Soybean futures are fractionally to 3 to 11 cents higher, with the May contract leading gains.

  • Soybeans futures moved to the plus side on value buying following a lower open to the day session.
  • May futures are indicating there is support at $14.20. Recent price action and the February/March uptrend line provide support at $14.00, as well.
  • Traders are somewhat more willing to buy as China has yet to cancel major tonnage of U.S. soybean purchases as more of the Brazilian crop becomes available.
  • The market looks for USDA's Quarterly Grain Stocks Report Monday to show quarterly stocks around 989 million bu., 10 million bu. below last year's tight level.
  • Lanworth expects March 1 soybean stocks to come in at even lower levels of around 940 million bushels.
  • Traders expect soybean acreage to increase for 2014 with pre-report trade guesses for Monday's planting intentions report coming in at 81.075 million acres. If achieved, this would be up around 4.5 million acres from 2013.
  • Gulf basis is 4 cents lower for immediate delivery at midday with deferred delivery periods quoted at steady.

 

Wheat futures continue to trade lower with HRW futures down 11 to 15 cents, HRS down 7 to 11 cents and SRW down 5 to 8 cents.

  • Profit-taking and the stronger U.S. dollar index are pressing wheat futures lower.
  • The selling pressure was triggered by precipitation over the parched Southern Plains today, with more light rain is in the near-term forecast. While precip totals are expected to be light, this is nevertheless easing crop concerns for the time being.
  • Traders are also beginning to more actively even positions ahead of Monday's Prospective Plantings and Quarterly Grain Stocks Reports.
  • Pre-report expectations call for spring wheat acreage of around 12.27 million, which represents a 674,000-acre increase from 2013. All wheat acreage of around 56.277 million is expected, which compares to 56.156 million in 2013.
  • Traders expect the Grain Stocks Report to reveal March 1 wheat stocks of around 1.042 billion bu., down from 1.235 billion bu. a year-ago.
  • Traders are brushing off Japan's marginal increase to its 2014-15 wheat for food import forecast.
  • Lanworth today said it expects persistent dry weather to lower 2014-15 wheat production in the EU, Kazakhstan, Russia, Ukraine and the U.S. by 5 MMT.
  • Gulf HRW and SRW basis is steady in midday trading.

 

Live cattle futures gapped sharply higher on the open, but have trimmed gains to trade slightly to moderately higher. Feeder cattle futures are moderately higher.

  • Live cattle futures gapped higher on the open on the $2 higher cash trade on the Plains yesterday. Even with today's gains, April futures remain more than $6 below the low end of cash cattle trade ranging from $152 to $154.
  • Futures have trimmed early gains, but April futures remain well short of testing the opening gap. Deferred futures, however, have nearly filled the opening gap.
  • Traders are reacting to a mixed message from the wholesale beef market. Choice boxed beef is 80 cents higher but Select boxed beef is 76 cents lower this morning. Movement, however, improved to 82 loads.
  • After a brief period in the black, packer profit margins are back near breakeven.
  • Strength in live cattle along with weaker corn futures are lifting feeder cattle futures.

 

Lean hog futures are mixed with front-month contracts up more than $1.00 and deferred contracts moderately to sharply lower.

  • Hog futures gapped lower on followthrough selling, but nearby contracts have erased those early losses and are posting strong gains.
  • But despite its reversal, April lean hogs are more than $4 below the cash index.
  • The April contract found buying support just above the $120 area, which is near the top of the upside gap left on March 17.
  • Some position evening is underway ahead of Friday's Quarterly Hogs & Pigs Report. While it is expected to show All Hogs & Pigs at 94.5% of year-ago levels, losses caused by the porcine epidemic diarrhea virus (PEDV) have already been factored into prices.
  • The wholesale pork market is flashing positive news with an 81-cent rise in the pork cutout value. Movement is a healthy 200.86 loads, which follows positive movement of 397.1 loads of pork yesterday.
  • Early cash hog bids are mixed. Some plants are paying 50 cents to $1 higher while others are offering steady to lower bids and are reducing kill hours.
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