Market Snapshot, 10:00 CT (VIP) -- September 25, 2012

September 25, 2012 05:03 AM
 

 

Corn futures softened with the open of pit trading to post losses of 2 to 3 cents.

  • Early gains thanks to improved outside markets on bullish consumer confidence data for September has given way to light profit-taking.
  • Harvest pressure continues to weigh on the market, though this will likely ease soon. USDA's progress report yesterday showed harvest was 39% complete as of Sunday.
  • Gulf corn basis is 3 cents stronger for immediate delivery, adding to ideas the market is quickly absorbing new-crop supplies.
  • South Korea purchased 133,000 metric tons (MT) of South American corn and 120,000 MT of optional origin corn.
  • The European Union's Monitoring Agricultural Resources trimmed its corn yield forecast for the region to 6.05 metric tons (MT) per hectare, which is down 13% from the five-year average.

 

Soybean futures pared gains with the open of pit trading to trade mostly 1 to 4 cents higher.

  • Soybean futures are benefiting from ideas the downside has been overdone as well as a lower U.S. dollar and improved risk appetite today.
  • But that is the extent of buying interest over the near-term as harvest was 22% complete as of Sunday. Harvest-related hedge pressure will continue to weigh on the market until harvest is halfway complete.
  • Gulf soybean basis is steady this morning, reminding the market of tight supplies and strong demand. Brazilian supplies are not expected to ease tight supplies until February.

 

Wheat futures have softened at all three locations to post losses ranging from 4 to 8 cents in most contracts.

  • Pressure on corn encouraged profit-taking in the wheat market after a firmer start.
  • Also encouraging profit-taking was yesterday's progress report that showed 25% of the winter wheat crop was planted, which is in line with the five-year average of 27%.
  • Plus, rain in the forecast for the Plains could improve establishment prospects for the crop.
  • Traders are also readying for the Small Grains Summary Friday. Pre-report expectations are for USDA to raise its all wheat production estimate slightly to 2.27 billion bushels.

 

Live and feeder cattle futures are posting slight to moderate losses this morning.

  • Traders are engaging in some light profit-taking today as a weak start to the week for boxed beef trade and negative profit margins will make packers very unwilling to raise cash cattle bids this week. Showlist estimates are near steady with week ago.
  • Last week, trade took place around $126 in the Southern Plains. Nearby futures are at a $1-plus discount to that price. Late-week trade is expected as bids remain absent.
  • Yesterday, Choice and Select cuts fell 65 cents and $1.65, respectively, and movement slowed to just 139 loads.
  • Ideas corn may strengthen as harvest moves past halfway complete is weighing on feeder cattle futures.

 

Lean hog futures got off to a mixed start but they have softened to slightly lower trade.

  • Traders are taking advantage of the market's recent rally by booking some profits this morning. Plus, futures remain at a hefty premium to the cash hog index. But that is the extent of selling interest as it appears the cash and pork market are working on a low.
  • The cash hog market is steady to firmer again today as packers are still keeping slaughter runs full as they are enjoying positive profit margins -- though not nearly as wide as in recent weeks.
  • Yesterday the pork cutout value rose 50 cents and movement was solid at 67.0 loads.
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