Market Snapshot, 10:00 a.m. CT (VIP) -- January 7, 2013

January 7, 2013 03:55 AM

Corn futures continue to enjoy gains of mostly 3 to 4 cents.

  • Corn futures are benefiting from a few signs U.S. corn prices may have dropped far enough to attract some export demand.
  • This morning, USDA announced an unknown destination purchased 102,200 MT of corn for the 2012-13 marketing year.
  • Also, Gulf basis levels were steady to a penny higher this morning.
  • Traders are also beginning to ready positions (including lightening some short positions) for the barrage of reports Friday.
  • But considering recent chart damage and lackluster export demand the past few months, corn bulls have a long ways to go to improve the market's technical posture.


Soybean futures are 3 to 9 cents higher, with nearby contracts leading to the upside.

  • Ideas the downside was overdone last week is encouraging corrective short-covering in beans to start the first full week of the year.
  • Some traders are also readying positions and moving to the sidelines ahead of the release of USDA's reports to be released on Friday. These January releases have consistently caused limit moves the past few years.
  • But buying interest remains limited as a 6-cent drop in Gulf basis for immediate shipment remind traders of recent order cancellations.
  • This, in turn, reminds traders that prospects for a record-large South American crop are promising and that these supplies will soon be available for export.


Wheat futures are mostly 7 to 8 cents higher in Chicago and Kansas City, while Minneapolis wheat is roughly 3 to 5 cents higher.

  • Wheat futures are following corn's lead, and is therefore enjoying corrective short-covering. Dollar weakness is also helpful to that end.
  • Traders' focus will also be on evening positions ahead of Friday's key reports, which include the Winter Wheat Seedings Report.
  • Traders will watch this morning's weekly export inspections report for signs U.S. prices are again competitive on the global market.
  • Rain in the forecast for the Southern and Central Plains is also keeping gains in check.


Live cattle futures are off to a narrowly mixed start with nearby contracts favoring the upside. Feeder cattle futures are under light pressure.

  • April through September live cattle futures are enjoying light followthrough buying today as traders anticipate tightening supplies will keep the cash market supported.
  • But enthusiasm is being curbed by the fact that cash trade was generally light last week, which means some of last week's animals will be added to this week's showlist.
  • Trade took place at mostly $128 last week, and February futures are already at nearly a $5 premium to those prices. This will also limit buying interest.
  • Also, there is some concern that the boxed beef market may be working on a near-term top as prices softened Friday after a week of gains. Choice values are nearing levels that have trimmed demand in the past.
  • Strength in the corn market is weighing on feeder cattle futures.


Lean hog futures are posting slight losses this morning, with the exception of the February contract.

  • Traders are booking some profits amid cash market uncertainty.
  • While packers are thought to be in need of supplies, negative packer profit margins will make them unwilling to raise bids. Early cash hog bids are steady.
  • On Friday, the pork cutout value rose 36 cents and movement was solid at 84.13 loads. But more improvement is needed to pull margins out of the red.
  • Futures are also facing light pressure due to the premium nearby contracts hold to the cash hog index.


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