Market Snapshot, 10:00 CT (VIP) -- November 7, 2012

November 7, 2012 04:08 AM
 

 

Corn futures reversed course to trade mostly 2 to 7 cents higher with the start of open-outcry trade.

  • Price action has been highly choppy through the overnight hours and so far this morning. The start of open-outcry trading triggered a fresh wave of buying.
  • The wheat market is lending spillover support, which is allowing corn futures to firm in the face of negative outside markets.
  • The U.S. dollar is firmer, while crude oil futures are lower and the stock market is also under pressure. Investors generally have a risk-off attitude amid macro-economic uncertainties as the fiscal cliff looms.
  • Traders are evening positions ahead of Friday morning's Crop Production and Supply & Demand Reports. Traders look for USDA to lower the size of the corn crop slightly, with carryover also seen rising slightly as USDA is expected to trim its export projection.
  • Gulf corn basis remains flat amid a lack of fresh export news.

 

Soybean futures are mixed, with buying limited by dollar strength.

  • Soybean futures came charging off their earlier lows with the start of open-outcry trade, but haven't been able to muster much buying interest above unchanged. Outside markets are highly negative as crude oil futures and the stock market are under heavy pressure, while the U.S. dollar index is higher.
  • Improved rainfall chances in northern production areas of Brazil this week are also weighing on soybean futures this morning.
  • Traders look for USDA to raise the size of the soybean crop slightly from last month and for 2012-13 carryover to climb by 3 million bu. to a still-tight 133 million bu. in Friday morning's reports.

 

Wheat futures have pushed out to double-digit gains in most contracts at all three exchanges.

  • Wheat futures are seeing support from concerns about the U.S. and Australian wheat crops. The Australian Bureau of Meteorology says neutral ENSO conditions are expected to linger, which raises concerns about dryness lingering in the U.S. Plains. The near-term forecast calls for continued dry conditions, which has traders anticipating an additional decline in crop condition ratings.
  • Highly negative price action in the U.S. dollar index limited buying interest early, but traders are more focused on the fundamental picture at the moment.
  • Traders look for USDA to raise U.S. wheat carryover by around 12 million bu. from last month to 666 million bu. in Friday morning's Supply & Demand Report.

 

Live cattle futures are under moderate to sharp price pressure.

  • Live cattle futures are facing heavy pressure from outside markets as traders react to last night's election results. The U.S. stock market is under heavy pressure and the U.S. dollar index is firmer.
  • While the boxed beef market has shown some price strength so far this week, traders are generally looking for steady to weaker cash cattle trade compared with last week as showlist numbers are higher and packer margins are highly negative.
  • Traders are also concerned about meat demand amid the recovery efforts on the East Coast.
  • Feeder cattle futures are under pressure amid the selling pressure on live cattle and strength in the corn market.

 

Lean hog futures are showing a mixed tone.

  • Lean hog futures opened under pressure, but quickly turned mixed. Selling interest is limited by the big discount December hogs hold to the cash market, which is helping trigger short-covering in some contracts.
  • Pressure is coming from outside markets as the stock market is under heavy pressure and the dollar is stronger.
  • The cash hog market is also steady to weaker as packers are working to keep margins in the black.
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