Market Snapshot, Noon CT (VIP) -- March 4, 2013

March 4, 2013 05:47 AM
 

 

 

Corn futures have softened to trade 5 to 11 cents lower.

  • Bull spreading is still apparent in the corn market, as new-crop futures are outpacing losses in old-crop futures. An active weather pattern is weighing on new-crop futures.
  • Double-digit losses in the wheat market are also weighing on corn futures, with May corn trading at around a 2-cent discount to May Chicago wheat.
  • This morning's announcement from USDA of a 100,000-MT old-crop corn sale to an unknown destination provided initial support for nearby futures, but is now being ignored.
  • Gulf corn basis is now steady for all months after surging this morning, which signals demand has softened.
  • Meanwhile, the former director of China's State Grain Administration says barring unfavorable weather, the country is set to produce a record corn crop in the year ahead, which will limit growth in trade with the United States.

 

Soybean futures are mixed, with nearby contracts firmer amid bull spreading. New-crop futures are mostly 1 to 2 cents lower.

  • Shipping delays out of Brazil are still providing support to old-crop soybean futures, although a steady Gulf basis signals there's no fresh demand news on the horizon.
  • Also supportive for old-crop futures is this morning's weekly export inspections report, as it showed inspections of 40.274 million bu., which was above expectations.
  • Weakness in corn and wheat futures, however, is keeping buying in check.
  • Buying in new-crop futures is being limited by a more active weather pattern that is bringing much-needed moisture to the western Corn Belt.
  • Traders are also noting that Argentina got decent rains through key production areas over the weekend..

 

Chicago wheat is 9 to 21 cents lower, Kansas City is 11 to 20 cents lower and Minneapolis is 8 to 16 cents lower.

  • Wheat futures have extended early losses as sell stops were triggered to do more technical chart damage.
  • Pressure is also stemming from recent moisture improvements across the HRW Wheat Belt, which is easing crop concerns for now.
  • Traders expect this week's drought maps to reflect improvement in the Central and Southern Plains after last week's heavy winter storm. There is the chance for rains through the Southern Plains late this week.
  • Additionally, demand news is lacking. This morning's weekly export inspections data showed wheat inspections of 23.98 million bu., which were within expectations.
  • The U.S. dollar index is under light pressure, but that's not enough to encourage short-covering in wheat futures.

 

April live cattle futures are slightly higher, with the rest of the market slightly lower. Feeder futures are slightly higher.

  • Front-month April live cattle have slightly extended early gains, but have yet to move above Friday's high of $130.70. Meanwhile, pressure on the rest of the market is being limited as traders anticipate tighter market-ready supplies over the near-term.
  • April live cattle are trading at a slight premium to last week's $128 cash cattle trade, which signals traders have a positive bias toward the cash market.
  • The boxed beef market has started the week strong, with Choice values up $2.03 and Select up $1.34. But movement is slow with just 57 loads changing hands this morning.
  • Tighter market-ready supplies due to winter weather stressing animals and limiting weight gains, combined with higher beef values, has traders looking for at least steady cash cattle trade later in the week.
  • Feeder cattle futures are firmer amid corrective short-covering and weakness in the corn market.

 

Lean hog futures are slightly lower in lackluster trade.

  • Despite being severely oversold according tot he 9-day Relative Strength Index, lean hog futures have slightly extended early losses as traders' attitudes remain bearish.
  • The cash hog market is mostly steady today amid light demand. A winter storm warning is in effect through tomorrow for portions of the western Corn Belt, which is limiting livestock marketings. But packers are not concerned about securing this week's needs.
  • April lean hog futures are trading at a premium to the cash index, which is adding to the price pressure this morning. The contract has posted a new-for-the-move low.
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