Market Snapshot, 10:00 CT (VIP) -- October 29, 2012

October 29, 2012 05:02 AM
 

 

The U.S. stock market is closed today, the CME Group closed its stock market futures and options trade at 8:15 a.m. CT and the bond market is closing at 11 a.m. CT -- all due to Hurricane Sandy. Pit trading at the NYMEX is also closed today, although electronic trading on the exchange is open. Closure of Federal government offices on the East Coast also means USDA's crop progress data will not be released today.

Corn futures have softened to narrowly mixed trade.

  • Fresh news in the corn market is limited today. Light short-covering is helping nearby contracts to favor the upside.
  • On the other hand, gains in the U.S. dollar index and heavy losses in soybean futures is limiting buying interest and encouraging light profit-taking.
  • Slow planting in Brazil and Argentina up the odds producers will shift acres to soybeans. This is also limiting losses.
  • Gulf corn basis is steady this morning, reminding the market of lackluster demand.

 

Soybean futures have softened to trade 20-plus cents lower through the July contract. Deferred months are posting slightly lighter losses.

  • Rains over the weekend in drier areas of Brazil and forecasts for more beneficial rains this week boost planting prospects. This ups the chances the country's production will be record-large.
  • Strength in the U.S. dollar index is adding pressure. Plus, low trading volume due to Hurricane Sandy trade disruptions is accelerating losses.
  • Traders are ignoring news China's state-run Xinhua news agency says according to its Ministry of Agriculture, China will import a record 57.5 MMT of soybeans this year.
  • This morning's weekly export inspections report is expected to reflect still-strong export demand for soybeans.

 

Wheat futures have softened to choppy trade at all three locations.

  • Dollar strength and spillover pressure from soybeans have led to some light profit-taking in wheat futures.
  • Trading volume is limited by the closure of some stock and options markets due to Hurricane Sandy.
  • Pressure on wheat is being limited, however, by dryness concerns in the U.S. Plains and expectations slowed exports from the Black Sea region will give U.S. wheat a boost on the export market.

 

Live cattle futures are posting slight to moderate losses this morning. Feeder cattle futures are choppy with nearbys favoring the downside.

  • The market is concerned that Hurricane Sandy will limit meat demand.
  • Plus, sharp declines in boxed beef values Friday and slowed movement signals the market has likely put in a top.
  • And last week's steady to lower cash cattle trade was disappointing, adding pressure.
  • Gains in the corn market is putting light pressure on nearby contracts, but some deferred months are benefiting from corrective short-covering.

 

Lean hog futures are moderately lower this morning, with nearbys leading to the downside.

  • Expectations for reduced meat demand on the East Coast due to Hurricane Sandy disruptions is weighing on the lean hog market.
  • The pork cutout value slid 50 cents on Friday, fueling ideas a top is in place. Movement has remained solid.
  • Traders expect futures to soften over the near-term, as evidenced by the fact that they have only extended the discount December futures hold to the cash hog index, which was most recently projected at $85.24.
  • Hog supplies continue to expand seasonally. As a result, cash hog bids are steady to $1 lower today.
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