Market Snapshot, Noon CT (VIP) -- May 15, 2013

May 15, 2013 07:11 AM
 

Corn futures have turned 2 to 4 cents lower in all but the lead July contract, which is fractionally lower.

  • Prices are lower as traders view current weather conditions highly positive for rapid corn planting. In addition, traders view current soil moisture supplies beneficial for a strong (although delayed) start to the the 2013 growing season.
  • Traders are reluctant to press the downside too heavily as another likely halt to corn planting coming as rain and cooler temps are in the forecast for the Corn Belt late this week and into next week. Some forecasters note a five-day turn back to dry conditions is forecast to follow that wet period.
  • The reported 14,000 barrel-per-day increase in ethanol production last week from the week prior plus the 418,000-barrel decline in ethanol stocks is tempering selling pressure.
  • Gulf basis fell 7 cents for May delivery. Otherwise, basis levels remain unchanged for June through September delivery.
  • The stronger U.S. dollar and weaker is price-negative.

 

Soybean futures have moved lower with losses of 7 to 8 cents in old-crop contracts and losses of 4 to 6 cents in new-crop beans.

  • The market is seeing pressure from the negative NOPA April soy crush data released today. NOPA reports April crush of 120.113 million bushels, which is below the lowest trade guess and the smallest since September.
  • The disappointing crush is offsetting the record basis levels for this time of year.
  • Gulf basis moved to 1 cent weaker for May following the release of the disappointing crush figures. Gulf basis is steady for June through August and 2 cents firmer for September.
  • Concerns late corn planting could boost planted soybean acres beyond those reported in March by USDA resurfaced today, adding to the negative tone in new-crop months.
  • Earlier today USDA announced a daily soybean sale for 171,000 MT of soybeans to China for 2013-14, but this news is now being overshadowed.

 

Wheat futures are under heavy pressure, with Chicago mostly 15 cents lower, Kansas City down 9 to 11 cents and Minneapolis 4 to 5 cents weaker.

  • Weakness in corn futures is pressuring wheat along with strength in the U.S. dollar index.
  • Technical-based selling has increased as losses build.
  • The market is shrugging off near-term weather forecasts for the Plains calling for hot and dry conditions.
  • But that could change if prospects change for the global wheat crop. Already, there are concerns about dryness in areas such as the Former Soviet Union and Australia
  • Gulf basis is unchanged for HRW and unchanged to a penny higher for SRW.

 

Live cattle futures are slightly lower. Feeder cattle are slightly to moderately lower.

  • Traders keep looking for a top in the product market but boxed beef prices keep making new highs.
  • Choice boxed beef values surged to another all-time high of $208.18 this morning, up $2.09. Just as impressively, movement improved to 144 loads.
  • Traders are starting to think ahead to Friday's Cattle on Feed Report, which is expected to reflect On Feed at 96.3% of year-ago, despite an expected surge in Placements, which the market expects to come in 12.1% above year-ago.
  • Feeder cattle are slightly weaker despite weakness in corn.

 

Lean hog futures are posting slight gains at midday.

  • Futures are finding strength from the surge in wholesale beef prices as pork prices look very attractive in the retail meat case relative to beef.
  • Cash hog bids are mostly steady across the Midwest and traders are expecting a generally firmer tone in the cash market into mid-summer.
  • The trade is finding support from a rise of 70 cents in the pork cutout value this morning. Plus, movement was strong at 322.5 loads.
  • But the stronger US dollar is seen as a negative to pork exports.
     
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