Market Snapshot, 10:00 am CT (VIP) -- October 1, 2012

October 1, 2012 05:11 AM

Corn futures softened to mixed trade with the open of pit trading, but most contracts are currently favoring the upside.

  • Spillover from soybeans encouraged profit-taking in the corn market following Friday's limit-up rally. This move was spurred by USDA's bullish grain stocks surprise that pointed to the need for more rationing.
  • USDA announced this morning Mexico bought 33,333 metric tons of corn for 2012-13 and 66,667 MT for 2013-14.
  • Gulf basis softened this morning, signaling Friday's price surge encouraged some producers to sell corn.
  • Also limiting selling pressure are expectations for this afternoon's Crop Progress Report from USDA to show harvest moved past halfway complete last week.


Soybean futures softened with the start of open-outcry trade to post losses in the teens to 30s, with nearby contracts leading the move to the downside.

  • After strong gains to wrap up the week Friday, soybean traders are booking profits to start the week. Early profit-taking triggered sell stops and accelerated selling.
  • USDA's Quarterly Grain Stocks Report on Friday set old-crop carryover at higher-than-expected levels. This is gaining more attention today, now that bullish corn carryover estimates have been factored into prices.
  • Adding profit-taking pressure is ongoing harvest. USDA's Crop Progress Report today will give the market a better idea of how close producers are to reaching the halfway complete mark, which is associated with an easing of hedge pressure.
  • Gulf basis levels were a penny lower this morning, signaling more supplies are available thanks to ongoing harvest.
  • Fresh demand news is expected to be lacking this week as China celebrates a week-long national holiday.


Wheat futures have softened to post losses in the teens to 20s at all three locations.

  • Spillover pressure from soybeans are weighing on the wheat market and is encouraging profit-taking after strong gains Friday.
  • Recent rains in the Southern Plains have improved soil moisture enough to encourage active winter wheat planting, though more northern regions remain worrisomely dry.
  • The Institute for Agricultural Market Studies (IKAR) raised its Russian wheat crop estimate by 1 million metric tons (MMT) to 40 MMT and says the country exported 7.9 MMT of grain since July 1. It sees sees October grain exports slipping to 2.5 MMT from 3 MMT in September.


Live cattle futures are narrowly mixed this morning, while feeder cattle futures are posting slight to moderate losses.

  • Cattle futures are enjoying some light short-covering amid ideas the downside was overdone last week as supplies are expected to tighten through year-end.
  • But that is the extent of buying interest, because the boxed beef and cash cattle markets have recently trended lower.
  • On Friday, Choice boxed beef values plunged $3.06 and Select fell $2.66. Movement also slowed to 150 loads.
  • Expectations are packer demand could be limited this week as retailers are switching from higher-quality grilling cuts to less expensive cuts.
  • Outside markets are also mildly supportive today after the release of better-than-expected U.S. manufacturing data for September.


Lean hog futures are enjoying slight to sharp gains in early trade.

  • Friday's Quarterly Hogs & Pigs Report was near in line with expectations and points to tightening hog supplies in 2013, which is supporting deferred contracts.
  • Also supportive is another 21-cent gain in the pork cutout value Friday. This along with less aggressive bidding has improved packer profit margins.
  • Early cash hog bids are mostly steady.
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