Market Snapshot, Noon CT (VIP) -- May 13, 2013

May 13, 2013 07:23 AM
 

Corn futures have rallied to trade double-digit higher in old-crop contracts with May and July up 20-plus cents. New-crop is 7 to 10 cents higher.

  • The expiration of the May contract tomorrow has resulted in some fireworks today with the May contract leading the chart higher.
  • Traders expect this afternoon's Crop Progress Report to show just 29% of the nation's corn crop is planted. If reached, it would tie with 1984 for the slowest on record. A year ago, corn planting was 87% finished and the five-year average for mid-May is 66%.
  • The trade expects farmers to make significant progress on planting early this week but are concerned about the forecast for rain to move back into the region later this week. And there are above-normal precip chances for the Belt next week.
  • Futures are finding support from USDA's weekly export inspections tally, which topped expectations and the week-ago figure at 12.695 million bu.
  • State-run China National Grain and Oils Information Center pegs China's corn crop this year at a record 214 MMT, but it sees imports up 85.2% to 5 MMT in 2013-14.
  • Gulf basis is steady from June to September delivery but down 7 cents for May.

 

Soybean futures are 11 to 27 cents higher in the old-crop contracts and 5 to 7 cents higher in the new crop.

  • Tight old-crop supplies has the May contract, which expires tomorrow, surging higher -- in sympathy with the surge in the May corn contract.
  • Gains in new-crop soybeans are being limited by USDA's bearish call for carryover stocks from the 2013 crop.
  • Traders expect this afternoon's planting update to show 10% of the crop is in the ground. If confirmed, it would be the slowest pace since 1996 and well behind the five-year average of 24%. Last year saw soybean planting at 46% complete.
  • Traders are paying little attention to USDA's weekly export inspections tally which came within light expectations at 3.351 million bu. and down more than 3 million bu. from the previous week.
  • Gulf basis dropped another 10 cents for May delivery at midday, but it is steady for June through September delivery.

 

Wheat futures are mostly 7 to 9 cents higher in Chicago, 8 to 12 cents higher in Kansas City and 5 to 11 cents higher in Minneapolis.

  • Wheat futures continue to follow corn higher.
  • Traders expect this afternoon's crop conditions update to reflect the poor state of the winter wheat crop and slow start for slow spring wheat planting.
  • Futures are finding support from today's weekly export inspections which came in above trade expectations and above the previous week's level.
  • The forecast for above-normal temps and limited rainfall in drought-stricken HRW country is also encouraging traders to build some weather premium into prices.
  • Gulf basis is unchanged at midday.

 

Live cattle futures are mixed with an upside bias. Feeder cattle futures have softened to mixed trade.

  • The corrective short-covering continues this morning after futures marked small gaps at the opening of trade. The market has edged off early gains and is in the process of filling those gaps, however.
  • Futures continue to hold a strong discount to last week's cash trade and traders point to weakness in boxed beef prices as signs consumer demand is weakening.
  • News Choice boxed beef prices fell 23 cents this morning to $204.75 on unimpressive movement of 90 loads is a damper on gains. Select cuts firmed 92 cents.
  • Early support came from news the U.S. is reportedly working on a protocol with Russia to ensure shipments of U.S. beef are ractopamine-free. But that support is limited as traders realize it will take months before this negative issue is resolved.
  • Feeder cattle futures are seeing some corrective short-covering in sympathy with live cattle futures, but the market is also seeing some profit-taking on strength in corn futures.

 

Lean hog futures remain narrowly mixed at midday.

  • The pending expiration of May lean hog futures has traders reducing the slight premium the contract holds to the cash hog index ahead of expiration Tuesday.
  • Traders are balancing the seasonal tendency for supplies and cash prices to trend higher against concerns on weakening consumer demand.
  • Cash hog bids are mostly steady this morning, but the pork cutout value weakened $1.01 and movement is a moderate 172.3 loads.
  • News USDA is working on a protocol to ensure Russia U.S. shipments are ractopamine-free provided light support in early trading today, but its impact is limited as traders realize it will take months to resolve this issue.
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