Market Snapshot, 10:00 CT (VIP) -- August 13, 2012

09:56AM Aug 13, 2012
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Corn futures have trimmed losses slightly to trade roughly 8 to 12 cents lower.

  • Corn futures are seeing some followthrough selling today after Friday's USDA reports inspired a sell-the-fact reaction and key bearish reversals for nearby contracts.
  • Recent rain in the Corn Belt is weighing on bean futures, which is in turn pressuring corn.
  • Signs of demand destruction continue to mount, including softer basis levels, reports countries are shifting to Brazil as a cheaper alternative to U.S. corn and news feed users are shifting from corn to wheat.


Soybean futures remain under heavy pressure with most contracts posting losses in the teens to 30s.

  • Weekend rains in the Corn Belt and more in the forecast later this week along with cooler temps are encouraging additional profit-taking today as they will still benefit some bean crops.
  • Plus the market is seeing some technical selling after Friday's highly bullish report failed to spark a high-range finish, which has some believing a high is in place or near.
  • Gulf basis is 7 to 10 cents lower for nearby delivery, signaling demand has softened.


Wheat futures have trimmed losses slightly to post losses in the teens at all locations.

  • Pressure on corn is spilling over to the wheat market today, though the market did improve as corn trimmed losses.
  • FranceAgriMer raised its soft wheat crop estimate to 36.5 million metric tons (MMT) from 35.9 MMT, saying late-season rains have boosted yields. This is in line with the estimate from France's farm ministry, which pegs the crop at 36.7 MMT.
  • Plus, the market still has Friday's bearish U.S. production and carryover numbers in mind.
  • Meanwhile, Morocco's state-run grains authority said it received no bids in its tender to buy up to 300,000 metric tons (MT) of U.S. soft wheat.


Live cattle futures are enjoying slight to sharp gains this morning. Feeder cattle futures are sharply higher.

  • Traders are reacting to firmer cash cattle trade late Friday. Sales took place at $119 to $120, but futures are already above these prices, which is limiting upside potential.
  • Traders will await showlist estimates to gauge how aggressive cash sales were and to form cash cattle expectations this week.
  • The market will also watch to see if the boxed beef market can build on last week's strong performance. On Friday, Choice values surged $2.43 and Select was up $1.02 with decent movement of 182 loads, signaling retailers plan to feature beef over Labor Day.
  • Feeder cattle are benefiting from pressure in the corn market.


Lean hog futures are split, with nearby contracts slightly to sharply higher and deferred months weaker.

  • Support for the soon-to-be front month October lean hog contract stems from the more than $16 discount it holds to the cash hog index.
  • Buying interest in other contracts is light due to seasonally expanding pork supplies.
  • Due to plentiful hog supplies, cash hog bids are steady to lower today, despite positive packer profit margins.
  • Light support comes from the Obama administration's announcement it will buy up to $170 million worth of pork, chicken, lamb and catfish to ease drought-related hardship.