Market Snapshot, Noon CT (VIP) -- May 17, 2013

May 17, 2013 07:14 AM
 

July corn has firmed and is about 12 cents higher, while the new-crop months are mostly 1 to 3 cents lower.

  • Tight supplies and spillover from soybeans are supporting July corn futures.
  • Informa Economics reportedly decreased its planted corn acreage forecast by 455,000 acres from USDA's March Prospective Plantings Report to 96.827 million.
  • The stronger U.S. dollar index and active planting progress in the Corn Belt continue to be negative factors.
  • Traders expect Monday's progress report from USDA to show at least 60% of the crop has been planted.
  • Planting should slow as rains are moving across the Upper Midwest this morning and more rain is in the forecast for much of the Midwest early next week.
  • Gulf basis is unchanged at midday.

 

Soybean futures started the day session under pressure, but all contracts have moved higher with old-crop futures up around 16 cents and new-crop up 5 to 7 cents.

  • Concerns over potential labor unrest at Brazilian ports due to passage of a port modernization bill by the Brazilian congress has traders bidding old-crop futures higher. Any near-term labor unrest in Brazil means more demand for limited U.S. old-crop supplies even if the modernization, when completed, would be bearish for U.S. soybeans.
  • Traders shrugged off a forecast by Informa Economics of a 1.2 million-acre increase in 2013 soybean acreage. The firm reportedly pegs total planted soybean acreage at 78.286 million acres, up from USDA's 77.1 million in March.
  • Gulf soybean basis has moved to unchanged at midday.
  • USDA announced a 138,000-MT soybean sale to an unknown destination this morning, with 18,000 MT for 2012-13 and 120,000 MT for 2013-14, as well as a 120,000-MT sale to China for 2013-14.

 

Wheat futures are down 4 to 5 cents in Chicago, down 4 to 7 cents in Kansas City and narrowly mixed in Minneapolis.

  • Minneapolis wheat is finding light support from Informa Economics' projection of a 300,000-acre decrease in planted spring wheat acreage from USDA's Prospective Plantings Report to 12.4 million acres.
  • Rain in the Northern Plains with more in the forecast is also lifting the Minneapolis wheat market as it slows spring wheat planting.
  • The strong dollar continues to pressure Chicago and Kansas City wheat along with the slight decline in new-crop corn futures.
  • Gulf basis levels remain unchanged.

 

Live and feeder cattle futures have softened to mostly moderately lower trade.

  • Traders continue to ignore surging Choice boxed beef prices. Choice beef moved to another all-time high of $208.96, up 19 cents, this morning. Select slipped 19 cents to $192.52. But movement was a slim 58 loads.
  • The trade senses a trend change for both cash and dressed beef prices, expecting consumers to balk at the record beef prices and shift to pork and chicken.
  • The push and pull between feedlots and packers continues. Feedlots believe prices even with last week's $126 level are justified given record boxed beef prices. Packers are looking at slumping movement.
  • Some cattle have moved in Kansas at $125.50, following trade yesterday in Texas at $125.
  • The strong U.S. dollar continues to raise export demand concerns.
  • The market is also reading for the Cattle on Feed Report this afternoon. It is expected to show On Feed at 96.3% of year-ago, Placements at 112.1% and Marketings at 102.9%.
  • The market also expects this afternoon's Cold Storage Report to show frozen beef stocks to be down slightly from the previous month and about even with a year ago.
  • Feeder cattle are lower on the sell-off in live cattle futures and gains in old-crop corn.

 

Nearby lean hog futures have softened to trade moderately to sharply lower through the October contract; more deferred contracts are slightly higher.

  • Nearby futures have turned lower in sympathy with the sell-off in live cattle futures.
  • The selloff is occurring in conjunction with a 19-cent decline in pork cutout value reported late-morning. Movement is light at 123.2 loads.
  • The trade looks for the afternoon's Cold Storage Report to show a slight increase in the amount of frozen pork in storage. Traders are looking for a 1.5% increase versus the previous month and an 11% rise versus the five-year average.
  • Cash hog bids are mostly steady today.
  • The strong U.S. dollar index continues to raise export demand concerns for pork.
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