Market Snapshot, 10:00 am CT (VIP) -- August 2, 2012

August 2, 2012 05:04 AM
 

 

September through July corn futures remain mostly 10 to 12 cents lower. Far-deferred futures are posting lesser losses.

  • Traders are again opting to take some profits out of the market despite some positive demand news this morning.
  • Forecasts call for rain chances the next several days across the Corn Belt. While the rains would be too late to help the majority of the corn crop, it's hard to generate buying interest when the forecast is wet.
  • Weekly export corn sales of 178,400 metric tons (MT) for 2011-12 and 23,000 MT for 2012-13 were above very low expectations, but weren't overly impressive. But USDA announced Mexico purchased 982,980 MT of corn for 2012-13 and 533,400 MT for 2013-14. That's a sign there is some panic buying among end-users.

 

August through March soybean futures are 20 to 40-plus cents lower, with far-deferred contracts posting lighter losses.

  • Forecasts calling for some beneficial rain for filling soybeans are weighing on soybeans. While rain events have continually been disappointing this summer, traders are taking profits out of the market ahead of the rain event.
  • Outside markets are also price-negative as the dollar is firmer and crude oil futures are under heavy pressure. That's pushing speculative money out of the long side of soybeans.
  • Weekly export soybean sales came in below expectations at 194,000 MT for 2011-12 and 52,400 MT for 2012-13. But China and unknown destinations were noted buyers.
  • Soymeal futures are sharply lower despite a new marketing-year high export sales figure of of 332,100 MT this morning.

 

Most Chicago and Kansas City wheat contracts are posting losses in the teens. Minneapolis wheat is mostly 7 to 9 cents lower.

  • Pressure on the corn market is weighing on wheat futures this morning. As a result, traders continue to take profits out of the market after the recent, strong runup.
  • No significant technical damage has been done yet, but futures are nearing support at last week's lows. A drop through that support would likely trigger sell stops.
  • Traders remain concerned about the size of the global crop, but this is mostly factored into the market and is therefore being pushed to the back burner for now.
  • Weekly export sales of 516,200 MT for 2011-12 and 4,500 MT for 2012-13 were within expectations.

 

Live and feeder cattle futures are mixed in early price action.

  • Weakness in the corn market isn't translating into as much support for live and feeder cattle futures as anticipated, especially in the feeder cattle market.
  • Expectations are for $1 to $2 higher cash trade compared with last week's $114 trade, but August live cattle are already trading at a $4.50-plus premium to those expectations.
  • Outside markets are limiting buying interest as there isn't much interest among investors in adding long positions in risky markets.
  • Weekly beef exports of 15,800 MT were up from the previous week.

 

Lean hog futures are under light to moderate pressure to start the day.

  • August lean hog futures opened with a mildly firmer tone, but quickly turned lower. Traders are anticipating more near-term pressure on the cash hog market.
  • Cash hog bids are steady to $1 lower on limited packer demand despite a strong performance in the pork product market Wednesday.
  • Traders continue to fret over the possibility of stepped-up sow liquidation as that would add to supplies at a time when they start to build seasonally. That continues to pressure fall- and winter-month lean hog futures
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