Market Snapshot, 10:00 am CT (VIP) -- December 7, 2012

December 7, 2012 04:13 AM
 

Corn futures have softened slightly with the open of pit trading to post losses around 7 to 8 cents through the July contract, while farther deferred months are seeing lighter losses in a range of 1 to 4 cents.

  • Dollar strength following better-than-expected jobs data today is encouraging light profit-taking as traders ready positions for the weekend.
  • Also, today's move through the 50-day moving average, which has acted as support the past few weeks, encouraged some technical selling.
  • The fact that Gulf corn basis is steady to 1 cent lower suggests there is no fresh export business in the works.
  • Another Taiwan purchase of Brazilian corn reminds traders that U.S. supplies aren't competitively priced.

 

Soybean futures continue to see losses around 6 to 10 cents.

  • Dollar strength is limiting buying interest across the commodity sector, including soybeans, to wrap up the week.
  • But that is the extent of selling interest as yesterday's impressive export sales tally and news China bought 115,000 MT of beans for 2012-13 in a daily sale reminds the market that soy demand is strong for a limited supply of beans.
  • Also, the inability of January soybean futures to find sustained buying interest around the $15.00 mark encouraged some technical selling this morning.
  • A drier forecast for Argentina next week is also encouraging of profit-taking.

 

Wheat futures are trading mostly 3 to 5 cents lower at all three locations.

  • Losses in the corn and soybean pits combined with weakness in the U.S. dollar index is weighing on the wheat complex.
  • But ongoing concerns about dryness in U.S. Plains and a forecast with just limited chances for relief limits downside risk.
  • Light pressure also comes from news International Grains Council says it expects global wheat production will rise 4% in 2013-14.
  • News South Korean flour mills bought two cargoes of U.S. wheat overnight is also limiting pressure.

 

Live cattle futures are posting slight to moderate losses this morning while feeder cattle futures are enjoying slight gains.

  • Traders are taking advantage of a firmer U.S. dollar index and yesterday's gains by booking some light profits this morning as they wait for cash cattle trade to begin.
  • In the meantime, buying and selling interest is limited as December futures are in line with last week's $125 to $126 cash cattle trade.
  • While better-than-expected jobs data could point to improved domestic red meat demand, the resulting dollar strength could be a deter to export demand.
  • Yesterday, Choice and Select boxed beef values slid 76 cents and $1.13, respectively, but softer prices encouraged stronger movement of 202 loads.
  • Losses in the corn market are supporting feeder cattle futures.

 

Lean hog futures are posting slight to moderate losses to start today's session.

  • Dollar strength is encouraging some followthrough selling today.
  • Packer demand is thought to be slowing as their profit margins have slipped well into the red and holiday buying is thought to be wrapping up.
  • Further, the pork cutout value slid 67 cents yesterday, though movement surged to 138 loads.
  • Also, the fact that traders appear comfortable extending the discount nearby futures hold to the cash hog index with just a week left until the December contract expires signals the market believes a top is in for the cash market. Early cash hog bids are lower.
     
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