Market Snapshot, 10:00 a.m. CT (VIP) -- January 8, 2013

January 8, 2013 04:03 AM
 

 

Corn futures improved with the start of open-outcry trade.

  • Corn futures are 1 to 5 cents higher, with the front-month March contract leading gains amid short-covering.
  • It may be early in the week, but traders say focus is on evening positions ahead of Friday's key USDA reports. Traders look for USDA to raise carryover from last month due to dismal export demand, but note that corn has moved to levels that have spurred fresh demand in the past.
  • Sources report South Korea has purchased more than 315,000 MT of optional-origin corn (all South American) since Friday to capitalize on the latest decline in price.
  • Additional support is coming from concerns surrounding the Argentine corn crop. While conditions have improved, producers are still struggling to plant the last 20% of the corn crop.
  • March corn futures are pivoting around yesterday's high of $6.90 and need to return to the $7.20 level to signal a near-term low is in the works.

 

Soybean futures are mostly 1 to 3 cents lower, with January beans firming.

  • Nearby futures have moved to fresh session highs, with improved buying seen at the start of open-outcry trade. Traders say commercials were active buyers yesterday and have returned to build long positions today.
  • Traders also say focus is on evening positions ahead of Friday's key USDA reports, which are expected to show a slight increase in carryover from last month.
  • Meanwhile, drier areas of northern Brazil are expected to see rain this week, which would further improve crop prospects. Rain remains plentiful in southern Brazil.
  • Chinese soybean imports in January may fall to 4.6 million tons compared to around 5.4 million tons in December, the state-backed China National Grain & Oils Information Center says.
  • March soybean futures are pivoting around resistance at yesterday's high of $13.89 1/2 and have a lot of work ahead in order to signal a near-term low has been secured.

 

Wheat futures are mostly 2 to 5 cents higher amid short-covering.

  • Traders in the wheat pit are more willing to cover short positions given the severely oversold condition of the market.
  • But strength in the U.S. dollar index is limiting gains, as well as forecasts for beneficial rains across much of the Southern Plains today and tomorrow.
  • Traders are also focused on evening positions ahead of a barrage of USDA data on Friday, as traders look for USDA to tighten wheat carryover slightly from last month.
  • State weather forecasters say Ukraine's winter grains crops are rated much better than year-ago but 12% of the crop is underdeveloped and vulnerable to winterkill.
  • March Chicago wheat futures so far remain within the boundaries of yesterday's trading range and need to return above the $7.90 level to signal a near-term low is in the works.

 

Live cattle futures are slightly to moderately lower on negative outside markets.

  • Live cattle futures have extended early losses to trim the premium nearbys hold to the cash index.
  • But traders feel comfortable with some premium to the cash market given the overall tightening supply situation.
  • But this week's showlist is up from last week after only light cash trade was reported at $128, giving feedlots less bargaining power.
  • Traders will continue to keep a close eye on the boxed beef market after prices were mixed yesterday on strong movement of 207 loads.
  • Feeder cattle futures are slightly lower on slight strength in nearby corn futures.

 

Lean hog futures are slightly higher, but price action is muted by mixed cash signals.

  • The cash hog market is mostly steady this morning, but some mixed undertones are expected due to varied demand.
  • Some packers are still in need of supplies for this week's kill, while others are working to improve negative profit margins.
  • February lean hog futures are trading at around a $3 premium to the cash index, which signals traders are cautiously optimistic toward cash.
  • Negative outside markets are limiting buying enthusiasm in livestock futures this morning.

 

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