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

September 10, 2012 05:08 AM

Corn futures moved into positive territory with the start of open-outcry trading, but are currently choppy with a slight downside bias.

  • Traders are working to even positions ahead of USDA's Crop Production and Supply & Demand Reports Wednesday morning. But as speculation revolves around just how small the crop is, downside risk is limited.
  • Expectations are for corn production of 10.403 billion bu. and 2012-13 carryover of 618 million bushels. 2011-12 carryover is expected to be pegged at 1.014 billion bushels.
  • Gains are being limited by harvest-related hedge pressure. Traders expect today's Crop Progress Report to show corn harvest at around 15% complete.


Soybean futures are posting losses of 3 to 6 cents in all but the front-month contract, which is slightly higher.

  • Traders are readying positions for USDA's key reports Wednesday morning, which are expected to reflect tight old- and new-crop carryover, along with a small production peg of 2.638 billion bushels.
  • Also, the 10:00 a.m. CT export inspections report will help the market gauge whether needed supply rationing has yet occurred.
  • According to official Chinese customs data, the country imported 4.42 million metric tons (MMT) of soybeans in August, down 2% from last year and 24.7% below the previous month. But for the first eight months of this calendar year, Chinese soybean imports are up 17.4% at 39.34 MMT.
  • Also, recent disappointing economic and trade data from China ups the odds for additional monetary easing in the near future.


Wheat futures are narrowly mixed in Chicago and Kansas City and slightly lower in Minneapolis.

  • Traders in the wheat market are also readying for the USDA's wheat balance sheet adjustments. Expectations are for USDA to raise its 2012-13 carryover estimate by 11 million bu. from last month to 709 million bushels.
  • Also, an aggressive export pace and diminished production from the Black Sea region is keeping global supply concerns close at hand.
  • Countering this, however, is news the government of India says it's likely to produce "more than 90 MMT" of wheat this year, which is higher than earlier indicated.
  • Dryness and heat in the U.S. Southern Plains is also supportive ahead of planting.


Live cattle futures got off to a choppy start and are currently favoring the downside. Feeder cattle futures are posting slight losses.

  • Late cash cattle trade took place Friday at prices ranging from $124 to $125 -- up $2 from the previous week's range. But this was expected and futures are already above the cash market, opening the door for some light profit-taking.
  • After an impressive week of gains, Choice and Select boxed beef cuts both softened Friday, though movement remained solid at 208 loads. Traders will watch the boxed beef market closely this week as prices are at levels that have slowed demand in the past.
  • Feeder cattle futures are mostly lower amid choppy corn trade. Traders haven't ruled out another corn rally if upcoming USDA reports show even tighter supplies than expected.


Lean hog futures are narrowly mixed, with nearby contracts firmer and deferred months choppy.

  • While fundamentals certainly favor bears, the lean hog market is technically oversold, which has encouraged some short-covering this morning.
  • Also providing light support to nearby futures is the discount they hold to the cash hog index, though this has narrowed to less than $3.
  • Meanwhile, hog supplies continue to expand seasonally, which is keeping the cash hog market steady to lower today, despite strong packer profit margins.
  • This has also kept pressure on the pork market. On Friday, the pork cutout value fell 34 cents, though movement was decent at 70.25 loads.
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