Market Snapshot, 10:00 am CT (VIP) -- August 16, 2012

August 16, 2012 05:04 AM

Corn futures have traded on either side of unchanged today. At present, nearby futures are enjoying slight gains while deferred months are seeing similar losses.

  • Traders in the corn market are weighing tight supplies against signs of demand destruction.
  • Weekly export corn sales fell short of expectations at 122,800 metric tons (MT) for 2011-12 and 130,600 MT for 2012-13.
  • On the other hand, Gulf basis is steady to higher this morning.
  • Rains in the Corn Belt are making it difficult for the corn market to find buyers despite the fact that at this point they will do little to improve yields.


Soybean futures are roughly 2 to 7 cents lower in all but the lead-month September contract, which is choppy.

  • Rains in the Corn Belt and cooler temps are favorable for the filling soybean crop.
  • FSA certified acreage data for 2012 is an additional source of pressure as it indicates planted acreage is likely 1.8 million higher than NASS's current estimate.
  • But pressure is being limited by impressive weekly soybean exports of 1.022 million metric tons (MT), most of which were for 2012-13. USDA also announced a daily soymeal sale of 123,900 MT to the Philippines for 2012-13.
  • Chinese end-users also continue to aggressively buy state-owned soybean reserves, purchasing 402,375 MT this week.


Wheat futures have improved to post gains in the mid- to upper-teens at all locations.

  • Wheat futures are being supported by global supply concerns.
  • Russian on-farm wheat stocks as of Aug. 1 are the lowest since 2003. While Russian officials have reiterated there are no plans for export restrictions, tight supplies could limit export sales from the country.
  • Dryness is also an increasing concern in western Australia. With El Nino building, the country could be in line for drier-than-normal growing conditions.
  • This is keeping attention away from weekly wheat export sales that fell short of expectations at 396,700 MT.
  • Also pointing to demand destruction, Thailand bought 100,000 MT of Indian wheat -- the first time it has done so in 8 years. It typically buys from the U.S. or Australia. Indonesia and South Korea have also recently purchased Indian wheat to cut costs.


Live cattle futures are mixed with a downside bias. Feeder cattle are narrowly mixed.

  • Traders in the live cattle market are squaring positions and booking profits ahead of the start of cash cattle trade and Friday's Cattle on Feed Report.
  • Pre-report expectations are that cash trade will take place above last week's $119 to $120 as showlist estimates are tighter and boxed beef prices have continued to strengthen. But futures are already above these prices, encouraging some light profit-taking.
  • The Cattle on Feed Report is also expected to be friendly with a sharp drop in the number of Placements in July compared to the year prior.
  • Feeder cattle futures are choppy thanks to similar action in the corn market.


Lean hog futures are narrowly mixed.

  • Lean hog futures are seeing some light, corrective short-covering after heavy losses yesterday. Plus the August contract is at nearly a $16.00 discount to the cash hog index.
  • But that is the extent of buying interest as supplies are building; packers are well supplied for the week and the pork market is showing signs of a short-term top.
  • Yesterday the pork cutout value fell $1.32 though movement picked up to 110 loads.
  • Cash hog bids are steady to lower today amid light packer demand.
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