REUTERS:

Wheat

Chicago Board of Trade wheat futures rose 1.9 percent on Wednesday on a wave of technical buying ahead of the U.S. Agriculture Department's annual Outlook conference, traders said.

• CBOT wheat prices found strength after falling to the 50-day moving average early in the session and accelerated as prices rallied past key resistance points at the 30-day and 100-day moving averages.
• The strength in the benchmark CBOT market spilled over to MGEX spring wheat, which eked out a small gain despite forecasts for improved crop weather in key growing areas of the United States.
• Significant snowfall is expected by the weekend in the dry areas of the U.S. spring wheat belt, which will provide a much-needed boost to soil moisture levels ahead of spring planting, said Don Keeney, meteorologist for MDA EarthSat Weather.
• Russia will maintain wheat export volumes of around 22 million tonnes in 2012/13, Russian industry and government officials said. [ID:nL5E8DM1AU]
• Ukraine's government said it had not urged grain traders to limit wheat exports and forecast that there would be no shortages of grain on the domestic market. [ID:nL5E8DM8WC]
• Tunisia's state grains agency issued an international tender to buy 50,000 tonnes of optional-origin soft wheat for shipment in April, European traders said. [ID:nL5E8DMA1K]
• Bangladesh tendered to import 50,000 tonnes of wheat to boost reserves, a procurement official said. [ID:nL4E8DM5H8]

1:19 PM CST     LAST    NET     PCT      LOW    HIGH  CURRENT

                        CHNG    CHNG                       VOL

CBOT MAR      645.00     12     1.9   628.50  645.75   43,430

CBOT MAY      646.75     10     1.6   633.25  647.50   51,429

 

Corn

Chicago Board of Trade corn futures closed higher on technical buying and unwinding of soybean/corn spreads in a profit-taking move ahead of Thursday when USDA will issue fresh 2012 supply and demand data at its annual outlook conference.

• At the outlook conference, that will be Thursday and Friday, USDA is expected to forecast the largest U.S. corn acreage in 2012 since World War Two and a potential record large corn crop. [ID:nL2E8DHBWG]
• Morgan Stanley on Tuesday said it was closing positions in the CBOT July/December 2012 corn futures spread that it initiated two months ago because the price premium for nearby July 2012 corn <CN2> over December <CZ2> was likely to flatten. [ID:nL2E8DLFJD]
• COLUMN: Speculator positions to swell in US corn and soybeans: Maguire. [ID:nL2E8DL8Y8]
• Key support for March at its 100-day moving average of $6.30-1/4 and resistance at the 200 day ma of $6.63-1/2. The nine-day RSI was at 53.

1:20 PM CST     LAST    NET     PCT      LOW    HIGH  CURRENT

                        CHNG    CHNG                       VOL

Corn MAR      639.00    9.5     1.5   625.75  639.50  125,928

Corn MAY      642.50      9     1.4   630.00  642.75   88,159

 

Soybeans

Soybean futures on the Chicago Board of Trade ended firm, erasing early losses as corn climbed to the day's highs toward the close and U.S. crude oil futures briefly turned positive.

• Soybeans trailed gains in corn as traders unwound long soybean/short corn spreads.
• Traders squaring positions ahead of USDA's annual Outlook Forum on Thursday and Friday. USDA's baseline projections earlier this month signaled a jump in U.S. corn ending stocks for 2012/13 and a drop in 2012/13 soybean stocks.
• USDA confirmed sales of 175,000 tonnes of U.S. soybeans to China for 2012/13 delivery.
• Forecasts for welcome rains in parts of South America hang over the market. Light showers moved across most of Argentina on Tuesday and minor amounts of rain fell in dry areas of southern Brazil. "There will be a few showers soon that will improve conditions in Santa Catarina and Parana in the south," said Don Keeney, meteorologist for MDA EarthSat Weather.
• Keeney said the six- to 10-day outlook was for improved rainfall in the dry areas of Brazil's Rio Grande do Sul, extending into Paraguay. Recent rains improved Argentina's soy crop prospects; more rain needed in southern Brazil.
• Sales of Brazil's 2011/12 soybean crop rose to 53 percent of total expected production, up from 51 percent a week earlier, analysts Celeres said. The firm said Brazil's soy harvest was 19 percent complete by Feb. 17, up from 11 percent a week earlier. [ID:nL2E8DM4ZM]
• March CBOT options expire on Friday. Traders are watching the $13 strike, with open interest in March soybean puts and calls near 11,000 contracts.

1:43 PM CST     LAST    NET     PCT      LOW     HIGH  CURRENT

                        CHNG    CHNG                        VOL

Soy MAR      1272.00   1.25     0.1  1261.50  1272.50   78,277

Soy MAY      1279.00   1.75     0.1  1267.75  1279.00   57,751

 

 

U.S. live cattle futures continued their record-setting climb on Wednesday, prodded higher by surging beef prices and all-time high prices for cattle.

Cattle for February delivery rose 0.45 cent, or 0.4% to 1.2935 a pound in trading at the Chicago Mercantile Exchange. They rose as high as $1.2977 a pound during the session, a new all-time intraday high for the spot contract, or soonest-expiring futures. April cattle rose 0.07 cent, or essentially flat, at $1.3115 a pound.

Cattle futures have climbed more than 5 cents a pound over the last two weeks due to fast-rising prices in cash cattle markets and an extended rebound in beef prices. Cattle sellers have tried to limit their listed inventories in recent weeks, and managed to force packers who need to fill orders to pay higher prices.

Falling meat production at stressed packers, meanwhile, has limited inventories of beef and forced retailers and restaurants to pay record prices. Wholesale beef prices were higher midday on Wednesday, extending a two-week period of heady gains.

The U.S. Department of Agriculture reported midday choice boxed beef prices up $2.47 per hundredweight at $196.62 and select up $1.08 at $192.23 a hundred pounds. Select prices are poised to make a new all-time high for the third consecutive day. Total sales were reported at 132 loads.

The higher beef prices have helped narrow profit margin estimates for meat packers, which have languished in negative territory since autumn. The industry continues to hold more slaughter capacity than available supplies, driving up prices as packers compete for shipments to stock their slaughterhouses.

The latest HedgersEdge packer margin index was minus $34.25 per head, compared with minus $40.95 the previous day. This is an estimate of packer returns on cattle slaughtered and processed expressed in the form of an index.

Initial bids in this week's cash cattle markets emerged today at $1.26 a pound live basis in Texas, western Oklahoma and Kansas. Cattle owners in Texas and Oklahoma are asking $1.32 to $1.34 a pound, and cattle in Kansas are priced at mostly $1.32 a pound. Sales a week ago were at mostly $1.29 in Texas and $1.28 a pound in Kansas.

In Nebraska, no bids have been reported yet. Owners there are asking 2 to 3 cents a pound over the February live cattle futures contract on a live basis and $2.08 a pound dressed.

Live sales last were from $1.27 to $1.295 and dressed at $2.02 to mostly $2.03 a pound.

Sharp gains in wholesale beef prices since Monday and further gains in live cattle futures are encouraging owners to seek more for their animals this week.

 

HOGS COMPLEX

Lean hog futures recovered some prior-day losses on Wednesday as investors were cheered by firm cash prices and supportive technical indicators.

April hog futures rose 0.5 cent, or 0.6%, to 90.32 cents a pound in trading at the Chicago Mercantile Exchange, the highest level since October for the spot contract. CME May hog futures rose 0.27 cents, or 0.3%, to 99 cents a pound.

Gains were limited by a second consecutive daily drop in pork prices, which failed to string together a series of day-over-day gains that often indicates an uptick in demand. The U.S. Department of Agriculture's pork carcass composite value, a measure of wholesale prices, on Tuesday fell 39 cents per hundredweight to $86.07, a one-week low.

The pork complex, in fact, continues to show clear signs of falling behind last year's heady pace, which included a long series of record prices for pork and futures. Wholesale pork prices currently sit about 5 cents a pound below their levels at the same time a year ago. April hog futures, meanwhile, are currently more than 3 cents a pound below their expiration price last year, when April contracts had a final value of 93.81 cents a pound, an all-time high expiration price for that contract.

Although pork prices have been relatively listless since mid-December, prices for hogs and cash markets have remained firm, and avoided the sharp corrections characteristic of crumbling fundamentals.

The Midwest direct hog markets were trading generally steady as some plants were still buying to complete their slaughter schedules for Friday and Saturday. Others were adding to their inventories for next week. Packers have collectively maintained average slaughters near 2.14 million head during the latest five weeks.

Expectations for prices Thursday are mostly steady to possibly firm. Some livestock dealers and analysts predict that a few plants may bid more aggressively for hogs as selling interest typically subsides late in the week. They also speculate that wholesale pork prices may be at or near a seasonal bottom, especially since beef prices are surging.

Projections for Saturday's slaughter range from 95,000 to 100,000 head. Predictions for the week's total are around 2.135 million, give or take a few thousand. The estimates remain subject to change.

The terminal markets traded steady to $1 higher on a live basis.