Market Snapshot, 10:00 am CT (VIP) -- January 29, 2013

January 29, 2013 04:03 AM
 

Corn futures are split this morning on bull spreading with nearbys marginally higher and deferred months slightly lower.

  • Fresh news is lacking today, which is limiting both buying and selling interest in the corn market.
  • Light support comes from signs export demand may be improving. Yesterday's weekly export inspections were the highest in months and Gulf basis firmed for near-term delivery yesterday. They are steady today.
  • Plus, heat and dryness is raising concern about Argentina's crop, though there is some rain in the forecast later this week. Recent updates have scaled back coverage areas, however.
  • Gains are also being limited by expectations for large corn plantings in 2013 along with improvement in Corn Belt soil moisture deficits, though much more is needed.
  • A weaker U.S. dollar index on strong home price data is also providing light support to nearby contracts.

 

Soybean futures firmed with the open of pit trading to trade 7 to 10 cents higher.

  • Traders are building some weather premium into prices amid concerns about heat and dryness in Argentina and Southern Brazil. Northern Brazil continues to enjoy favorable weather, however.
  • Concerns about the logistics of getting South American supplies shipped are also building, though major soy exports are still a few weeks away.
  • A fairly regular stream of daily soybean sales announcements keeps strong soy export demand for a tight U.S. crop in focus.

 

Wheat futures have improved slightly to trade 4 to 5 cents higher in Chicago, around 6 cents higher in Kansas city and roughly 2 to 4 cents higher in Minneapolis.

  • Light short-covering in the wheat market picked up as soybean futures firmed this morning.
  • Support also comes from a reminder of tight Black Sea region supplies. Today, Russia's deputy ag minister said the country will soon officially cut its 2012-13 grain export forecast from 15.5 MMT to 14 MMT and the country plans to sell another 3 MMT of intervention stocks into the domestic market.
  • Plus, there is little rain in the forecast for the Central and Southern Plains and conditions in the Wheat Belt deteriorated in January.
  • Outside markets are also supportive of commodity buying this morning thanks to strong housing data.

 

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

  • Cattle futures rallied sharply yesterday after a bullish Cattle on Feed Report and news Japan will ease its U.S. beef import restrictions. Today, traders are taking advantage of those gains by booking profits.
  • But that will be the extent of selling interest as this week's early cash cattle indications point to firmer cash trade.
  • Showlists estimates are sharply lower for the week and the boxed beef market got off to a favorable start yesterday with firmer prices and solid movement.
  • But futures are already at a steep premium to last week's $122 to $124 trade, so near-term upside potential could be limited.

 

Lean hog futures are off to a narrowly mixed start, with most contracts favoring the upside.

  • Tightening market-ready hog supplies made even tighter by the recent Midwest ice storm are keeping the cash hog market steady to higher. There is also some concern another snow/rain event could further disrupt transportation the second half of the week.
  • Light support also comes from the 52-cent gain in the pork cutout value yesterday, though movement slowed notably to 34.13 loads.
  • While this improved margins slightly, packers are still cutting in the red, limiting their willingness to raise bids.
  • Pressure is also being limited by the discount the front-month contract holds to the cash hog index.
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