Market Snapshot, Noon CT (VIP) -- May 9, 2013

May 9, 2013 07:23 AM

Corn futures have rallied to post double-digit gains in old-crop months, with May 20 cents higher. New-crop is 7 to 8 cents higher.

  • Rain the western Corn Belt is slowing planting, which has again sparked worries about delayed plating.
  • Traders are also readying for USDA's balance sheet adjustment tomorrow. They look for USDA to project ending stocks of 1.973 billion bu. for the 2013-14 crop year.
  • Traders are shrugging off this morning's disappointing weekly export sales of 115,800 MT for 2012-13 and sales of 169,900 MT for 2013-14.
  • Gulf basis softened 2 cents for immediate delivery but rose rose a penny for June delivery. Basis strength around the country points to tight old-crop supplies.


Old-crop soybean futures continue to post double-digit gains, while new-crop is seeing gains of mostly 2 to 4 cents.

  • Strong demand for old-crop supplies has the May contract at eight-week highs.
  • China bought 110,000 MT of soybeans in a daily sale today, a sign that current prices are seen as a value.
  • Traders continue to even positions ahead of tomorrow's USDA reports. This has some traders covering short-positions in the new-crop contracts.
  • Pre-report expectations are for USDA to project 2013-14 carryover at 239 million bushels.
  • Weekly export sales of 193,800 MT for 2012-13 and 391,700 MT for 2013-14 were within expectations.
  • Gulf basis rose 2 to 5 cents for May delivery at midday, signaling more demand news may be ahead.


Chicago wheat futures have increased their gains to trade double-digit higher in Chicago and Kansas City and 9 to 10 cents higher in Minneapolis.

  • Spillover strength from corn and soybeans is a primary factor.
  • The gains are coming in the face of a stronger U.S. dollar.
  • Weather concerns are supportive as there are freeze chances for the Northern Plains.
  • Weekly export sales of 239,200 MT for 2012-13 and 226,300 MT for 2013-14 matched expectations.
  • Iraq tendered for at least 50,000 MT of optional origin wheat. Jordan tendered to purchase 150,000 MT of optional origin milling wheat and 100,000 MT of optional origin feed barley.


Live cattle futures are mostly slightly to moderately higher. May feeder cattle are slightly weaker but other contracts are moderately stronger.

  • Live cattle futures are being supported by higher wholesale beef prices and some thought demand for Memorial Day grilling may be better than thought.
  • But buying enthusiasm is largely limited to short-covering as the demand concerns linger, as illustrated by the wide gap between cash and futures.
  • Choice boxed beef prices moved to an all-time record Wednesday and pressed another 24 cents higher today to $204.91. Select cuts also rose 46 cents, as well, to $191.09. Movement was a light 70 loads, however.
  • Additional sales took place in Kansas at $126 today. While this is down $2 to $3 from last week, it is well above futures.
  • Feeder cattle futures are enjoying corrective short-covering.


Lean hog futures have improved to mixed trade.

  • Some light buying interest has returned to the market thanks to improvement in the pork market and steady to firmer cash hog bids today.
  • The pork cutout value rose $1.10 today and movement was solid at 219.7 loads.
  • But negative packer margins continue to limit buying interest in futures, especially with the cash index at a discount to futures.
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