Market Snapshot, 10:00 am CT (VIP) -- October 30, 2012

October 30, 2012 05:03 AM
 

The U.S. stock and bond markets are closed today, but there are plans to resume trade Wednesday. Electronic trading in the energy and metal markets is operational today, but floor trade is closed.

 

Corn futures have improved to trade around 5 cents higher through the July contract.

  • Corn futures are enjoying short-covering amid spillover support from soybeans today. Dollar weakness is also encouraging of this.
  • But that is the extent of buying interest as fresh news is limited and trading volume is light due to weather disruptions on the East Coast.
  • UkrAgroConsult revised its Ukraine grain crop forecast to 42.15 MMT from 42.41 MMT, which included a 200,000-MT cut to its corn production estimate to 18.8 MMT.
  • Ideas slow planting in Brazil and Argentina will cause producers to shift more corn acres to soybeans is also mildly supportive.

 

Soybean futures extended gains with the start of the open-outcry session to trade double-digits higher through the August contract.

  • Traders are covering short-positions, encouraged by a weaker dollar and ideas the downside was overdone yesterday.
  • Fueling such ideas is news China's Ministry of Commerce raised its October soybean imports forecast from 3.66 MMT to 4.22 MMT. This compares to imports of 4.97 MMT in September.
  • The tight U.S. supply situation ups the importance of realizing a large South American crop. Thus, too much rain in southern Brazil and Argentina and too little rain in other areas of Brazil that has delayed planting is worrisome. However, this could also result in acres being shifted from corn to soybean.

 

Wheat futures are enjoying slight gains at all three locations.

  • Wheat is being pulled higher by gains in the corn and soybean markets, along with light corrective short-covering. Otherwise, it is a quiet day in terms of fresh news.
  • UkrAgroConsult left its wheat production forecast for Ukraine unchanged at 14.18 MMT.
  • Buying in the wheat market will remain limited until the market sees proof export demand for U.S. wheat has improved due to tightening global stocks. This has yet to occur.

 

Live cattle futures are off to a slightly firmer start. Feeder cattle futures are currently favoring the downside in choppy trade.

  • Live cattle futures are enjoying light short-covering amid dollar weakness.
  • But uncertainty about what affect Superstorm Sandy will have on red meat demand is limiting buying interest.
  • Choice boxed beef values improved another 68 cents yesterday, though Select cuts fell 62 cents. Movement was decent at 151 loads.
  • Boxed beef values must strengthen to justify firmer cash cattle prices compared with last week's mostly $127 trade in the Plains. Packers have been cutting in the red and ideas persist that high prices will eventually slow demand.
  • Gains in the corn market have encouraged profit-taking in feeder cattle futures.

 

Lean hog futures are posting slight gains across the board this morning.

  • Futures are enjoying corrective short-covering after heavy losses yesterday did some technical damage.
  • But buying will be limited as packer demand for hogs is light due to some plants shutting down temporarily in the eastern Corn Belt and amid plentiful supplies.
  • Early cash hog bids are steady to lower amid demand concerns in the wake of Hurricane Sandy, despite the fact that packer cutting margins have improved.
  • The pork cutout value firmed 9 cents yesterday, but movement slowed to 29.75 loads.
     
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