Market Snapshot, 10:00 am CT (VIP) -- December 27, 2012

December 27, 2012 04:04 AM
 

Corn futures continue to face light pressure with most contracts down 1 to 3 cents.

  • Corn is facing followthrough selling today amid a lack of fresh fundamental news and on outside markets softening after the market learned that the Consumer Confidence Index plunged in December.
  • Demand remains sluggish and the market's technical posture favors market bears.
  • Meanwhile, the ongoing fiscal cliff saga and the dire consequences if lawmakers do not produce a debt and spending deal make few willing to add risk.
  • News Taiwan has canceled a tender for U.S. corn due to high prices is adding to the negative tone.
  • Gulf basis levels firmed for March delivery and were steady for other months.

 

Soybean futures are fractionally to 6 cents higher this morning, with nearbys leading to the upside.

  • Soybean futures are enjoying corrective short-covering amid ideas the downside was overdone yesterday.
  • But that is the extent of buying interest as the fiscal cliff standoff continues and the approaching South American harvest is easing concerns about tight U.S. supplies.
  • News Taiwan Sugar Corp. canceled a tender to import 12,000 MT of U.S. beans due to high prices reminds the market of recent large Chinese order cancellations and limits buying interest.
  • The market will need signs prices have dipped to levels that have brought bargain buyers back to the table to reverse the recent downtrend.
  • Steady Gulf basis levels this morning does not indicate fresh export news is near.

 

Wheat futures have seen choppy trade this morning, but futures at all three locations are currently posting losses around 2 to 6 cents.

  • Wheat futures need either fresh export news or spillover strength from corn to rally. Both are lacking today.
  • Dollar strength on disappointing consumer confidence data for December are adding to the negative tone. Commodities will likely continue to struggle to find buyers until a fiscal cliff deal is (hopefully) reached.
  • Recent precip with more in the forecast for the Southern and Central Plains also makes it difficult for wheat to find buyers.

 

Live and feeder cattle futures are posting moderate losses this morning.

  • Live cattle futures are seeing profit-taking today after a firmer close yesterday.
  • Also, traders are working to reduce the steep premium nearby futures hold to last week's cash trade at mostly $126 on the Southern Plains. The December contract expires Monday and it is currently at a $2-plus premium to last week's prices.
  • But selling interest is limited by expectations cash cattle trade may get underway soon at at least steady prices compared to last week.
  • While packers are cutting in the red and are preparing for another holiday-shortened kill schedule, the boxed beef market got off to an impressive start yesterday and showlist estimates are sharply lower this week.
  • Feeder cattle futures are also facing profit-taking pressure as the January contract is at roughly a $3 premium to the cash index.

 

Lean hog futures are posting moderate losses in early trade.

  • Traders are reducing risk exposure ahead of what is expected to be a friendly Quarterly Hogs & Pigs Report Friday.
  • Also encouraging risk-aversion was a plunge in Consumer Confidence Index in December amid fiscal cliff worries.
  • The steep premium February lean hogs hold to the cash hog index is adding incentive for traders to book profits.
  • A steady cash hog market gives market bulls little to get excited about. Packer profit margins are near breakeven and they are preparing for another holiday-shortened week.
  • And though pork movement was strong yesterday, the pork cutout value fell 16 cents.
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