Market Snapshot, Noon CT (VIP) -- March 5, 2014

March 5, 2014 06:15 AM
 

Corn futures are mixed and choppy with nearby contracts up 1 to 2 cents but later contracts down 1 to 5 cents.

  • Profit-taking continues to dominate trading today, but trading continues to be confined to a narrow range.
  • Traders are pausing to reassess positions following the recent upswing in prices and turbulence out of Ukraine. Charts show prices clearly in an upturned.
  • The market is finding mild support from news China may approve Viptera corn (MIR 162) the first half of the year. But plenty of skepticism remains that any action will occur quickly.
  • Traders are looking ahead to tomorrow's Weekly Export Sales Report for an update on whether or not prices have risen high enough to curb demand.
  • Ethanol production the week ended Feb. 28 declined 11,000 barrels per day (bpd) to 894,000 bpd. Ethanol stocks declined 413,000 barrels to 16.61 million barrels however.
  • Gulf corn basis is steady at midday with the exception of the August delivery period, which is 5 cents lower.

 

Soybean futures have trimmed earlier losses and are mixed with a downside bias.

  • Profit-taking is dominating soybean futures as well this morning, however news of a small cancellation of U.S. soybean sales by China is also viewed as slightly negative.
  • The May contract offers support at the $14.00 area. Today's trading has yet to take out yesterday's low at $14.04 1/4
  • The market saw some light pressure early on USDA's announcement China canceled 245,000 MT of old-crop U.S. bean orders. Trade reaction is subdued as the amount involved is relatively small and cancellations have been expected for months.
  • Providing support are lower crop estimates out of Brazil due to drought and quality-compromising late-season rains in some areas. Bulls hope this means Chinese cancellations may be lighter than anticipated, pointing to higher U.S. exports.
  • Weakness in soybean meal futures along with their troubling chart pattern has some traders nervously taking profits today as well.
  • Gulf soybean basis is steady at midday.

 

HRS wheat futures at 1 to 11 cents higher while HRW is mixed with an upside bias and SRW wheat futures are down 1 to 2 cents.

  • Profit-taking is underway in wheat today, as well, in spillover from corn and soybeans.
  • In addition, traders are viewing the forecast for precip to fall across the Southern Plains as positive for crop conditions as it will relieve some of the drought conditions in the area. Traders are brushing off the fact that some of this is expected to fall as snow and sleet.
  • Ukraine's ag minister said overseas trading houses have not yet resumed the completion of new grain export contracts due to continued concerns about tensions between Ukraine and Russia.
  • The European Commission today projected the EU's wheat production will hold steady in 2014-15 relative to the previous marketing year as an increase in acreage will likely offset lower yields.
  • SRW and HRW Gulf basis are steady at midday.

 

Live cattle futures have moved sharply lower after gapping higher on the open. Feeder cattle futures are down sharply as well.

  • Profit-taking has overwhelmed trading this morning after futures gapped higher on the open and failed to attract any followthrough buying. Prices have since fallen, more than filling the gap. The front-month has fallen to the $143.00 support area.
  • Open interest fell off in recent days on the most recent surge higher, indicating new bulls were not entering the market and shorts were covering positions. This will help relieve a seriously overbought condition.
  • Ideas cash cattle would trade at least steady if not higher lifted futures on the open. April live cattle futures are at a substantial discount to last week's $150 trade on the Southern Plains.
  • Trade sources indicate feedlots in the South are asking $153 to $154.
  • Boxed beef prices continue to rise. Choice and Select cuts are up $2.99 and $2.31, respectively, this morning. Movement also improved to 89 loads.
  • Packers are still dealing with negative margins, which will make this week's cash negotiations sticky.
  • Feeder cattle futures are down on the selloff in live cattle futures.

 

Lean hog futures feature two-sided trading with nearby contracts moderately to sharply lower, summer contracts moderately higher and fall contracts slightly to sharply lower.

  • Volatility is today's prime feature as nearby contracts gapped higher, pushed even higher and then slumped on profit-taking.
  • Summer contracts, however, are firmer on worries over death losses from PEDV.
  • Open interest is slipping, which will help relieve the market's overbought condition.
  • Wholesale pork continues its surge with prices up 74 cents this morning. In addition, the price strength comes on strong movement of 313 loads.
  • Cash prices are moving higher on the strength in the product market and tightening supplies. The cash hog index has moved above the $100 mark.
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