Market Snapshot, 10:00 am CT (VIP) -- November 19, 2012

November 19, 2012 04:09 AM
 

Corn futures have extended gains to trade 7 to 9 cents higher.

  • Corn futures are benefiting from improved risk appetite and spillover from the soybean market. Traders are hopeful the administration and lawmakers will address the fiscal cliff when they return from recess. Plus, existing home sales for October topped expectations.
  • Demand for U.S. corn is expected to improve, especially among Asian buyers, due to ongoing shipping delays from Brazil, reportedly for at least 1.5 MMT.
  • Concerns about low water levels on the Mississippi River have also eased.
  • Otherwise, expect quiet, pre-holiday trade ahead of Thanksgiving.

 

Soybean futures have firmed to post gains in the mid- to upper teens.

  • A sharply weaker dollar and ideas the downside has been overdone are encouraging soybean buying today.
  • China says it will temporarily suspend auctions of soybeans from state reserves as it starts to stockpile new-crop soybeans. Traders are hopeful this will translate to improved export demand for U.S. supplies.
  • USDA announced a 20,000 MT soyoil sale to an unknown destination for 2012-13, which traders suspect is China. This follows two soyoil sales for even greater amounts last week.

 

Wheat futures are roughly 5 to 6 cents higher in Chicago, 2 to 5 cents higher in Kansas City and choppy with an upside bias in Minneapolis.

  • Wheat futures are favoring the upside thanks to spillover support from corn and soybeans, along with a weaker U.S. dollar index.
  • The market remains supported by concerns about dryness in the U.S. Plains and tightening supplies in areas such as the Black Sea region and Australia.
  • But buying interest is limited as this has not yet improved demand for U.S. supplies. Most recently, African importers have begun buying Indian wheat due to tightening Black Sea region supplies.
  • Ukraine continues to actively sell wheat ahead of its expected Dec. 1 halt on exports. The Ukraine Agrarian Confederation says 900,000 MT of wheat were exported the first half of November.

 

Live and feeder cattle futures are enjoying slight to moderate gains.

  • Friday's Cattle on Feed Report came in about as expected, signaling tightening supplies, and cash cattle trade took place at $125 to $126 which was steady to firmer compared to the week prior.
  • Boxed beef prices were narrowly mixed Friday, with Choice values up 9 cents and Select cuts down 5 cents. Movement was impressive at 207 loads.
  • Thus, traders are able to focus on budget talk optimism and better-than-expected existing home sales for October, which have improved risk appetite.

 

Lean hog futures are slightly to sharply higher this morning, with nearby contracts as the upside leader.

  • Weakness in the U.S. dollar index and gains in the stock market and crude oil futures has given lean hog futures a boost. Early gains encouraged technical buying interest.
  • Also supportive was a 93-cent gain in the pork cutout market Friday, though movement slowed to 43.75 loads.
  • Futures are also benefiting from expectations demand will improve after Thanksgiving and that supplies will start tighten by the first quarter of the new year.
  • Packer profit margins are improved, but downtime due to Thanksgiving this week will keep cash hog bids steady to lower.
     
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