Market Snapshot, 10:00 am CT (VIP) -- November 21, 2012

November 21, 2012 04:07 AM
 

Note: Grain and livestock markets will observe normal trading hours today ahead of the Thanksgiving holiday.

 

Corn futures have softened to post fractional to 4-cent losses across the board.

  • Light trading volume due to the Thanksgiving holiday has led to choppy action this morning as corn futures continue to test resistance levels at the 40- and 50-day moving averages -- thus far unsuccessfully.
  • Selling pressure is being limited by firmer corn basis levels around the country the past week and a surge in Gulf basis levels earlier this week. Today, Gulf basis is up 2 cents for near-term delivery. Shipping troubles and tight supplies are supporting this action.

 

Soybean futures softened with the open of pit trading to post losses of 3 to 7 cents.

  • Early gains in soybeans gave way to profit-taking. Thin volume has amplified price moves.
  • Daily soy sales announcements from USDA are limiting selling interest, however, as they remind the market that demand for a tight supply of beans has remained strong. Gulf basis strength this week is a reminder of this.
  • China bought 120,000 MT of soybeans and 20,000 MT of soyoil and unknown destinations purchased 56,000 MT of soyoil. All of these buys are for 2012-13 delivery.
  • Traders remain hesitant to add risk ahead of what will be an extended weekend for many as the soybean market has done serious chart damage in November.

 

Wheat futures have held onto gains of roughly 1 to 4 cents at all three locations despite profit-taking pressure in the corn and soybean market.

  • Wheat continues to benefit from record-setting high temps and dryness in the U.S. Southern and Central Plains, which has led to a steady decline in crop condition ratings.
  • The market was also reminded of tightening Black Sea region supplies. Russia's deputy ag minister raised the ceiling on grain exports for 2012-13 to 15.5 MMT, but says 11 MMT of grain have already been exported for 2012-13.
  • Buying interest is being limited by weakness in the corn and soybean markets.

 

Live and feeder cattle futures are posting moderate gains this morning.

  • Live cattle futures gapped higher on the open thanks to technically-driven followthrough buying. Futures are at a premium to the top end of last week's trade, signaling steady to higher cash cattle trade is expected.
  • Expectations are building for cash cattle trade today; packers are in need of supplies for a full slaughter schedule next week and they have raised bids to as high as $127 in northern locations, which is above last week's $125 to $126 trade.
  • Boosting expectations for firmer cash trade, Choice and Select boxed beef values rose 11 and 87 cents, respectively, yesterday and movement surged to 245 loads.
  • Feeder cattle futures are benefiting from spillover from live cattle, tightening supply prospects and now-softer corn prices.
  • The U.S. dollar index has moved back into positive territory after a slide in consumer confidence in November and amid ongoing euro-zone concerns. This is limiting commodity buying interest.

 

Lean hog futures are off to a choppy start with nearby contracts favoring the upside.

  • Light trading volume and limited news is keeping action choppy this morning.
  • Traders are hesitant to add new positions ahead of this afternoon's Cold Storage Report, which is expected to show record-large frozen pork stocks for the end of October.
  • While the pork cutout value slid 36 cents yesterday, this encouraged a surge in movement to 146.75 loads.
  • The cash hog market is expected to be choppy again today. While some packers are in need of a few more loads this week and early next week and they are enjoying wide profit margins, supplies are generally seen as plentiful.
     
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