Market Snapshot, 8:30 am CT (VIP) -- August 16, 2012

August 16, 2012 03:40 AM
 

Corn futures have softened to post fractional to 1-cent losses in most contracts.

  • Corn futures continue to mildly favor the upside, but buying interest is limited. Selling interest is also limited, which is keeping trade light.
  • Weekly export corn sales were below expectations at 122,800 metric tons (MT) for 2011-12 and 130,600 MT for 2012-13. This is another sign high prices have curbed use.
  • Gulf basis is a little firmer this morning as supplies are tight.

 

Soybean futures have again softened after briefly turning higher. Futures are seeing losses around 2 to 8 cents.

  • Rains are pushing across the Corn Belt and scattered precip is expected throughout the day. Also, below-normal temps are likely to stick around through next week. The non-threatening weather forecast is limiting buying interest.
  • Weekly export soybean sales topped expectations at 1.022 million MT for the 2011-12 and the 2012-13 marketing years combined. China was the lead buyer, purchasing 121,100 MT of old-crop beans and 585,000 MT for the 2012-13 marketing year.
  • Chinese end-users also continue to aggressively buy state-owned soybean reserves, purchasing 402,375 MT this week.
  • USDA announced a daily sale of 123,900 MT of soymeal to Philippines for 2012-13.

 

Wheat futures are posting gains of 9 to 13 cents at all three exchanges.

  • Fundamental support for wheat is coming from global supply concerns. Russian on-farm wheat stocks as of Aug. 1 are the lowest since 2003. While Russian officials say there are no plans for export restrictions, tight supplies could limit Russian export sales.
  • Dryness is also an increasing concern in western Australia. With El Nino building, the country could be in line for drier-than-normal growing conditions.
  • Weekly wheat export sales were below expectations at 396,700 MT.

 

Live cattle futures are called steady to lower on profit-taking. Feeder cattle are expected to open lower on pressure from corn.

  • Cattle futures are expected to favor the downside as traders wait on cash cattle trade to develop. August live cattle futures ended Wednesday's session at a $2 premium to the top end of last week's cash trade. But the downside should be limited to light corrective selling as traders anticipate a bullish supply situation moving forward.
  • Traders are generally expecting firmer cash cattle prices to develop in the Plains, although active cash trade may not be seen until late Friday.
  • In addition to waiting on cash trade, cattle traders are also evening positions ahead of Friday afternoon's Cattle on Feed Report, which is expected to show a sharp drop in Placements last month and On Feed just slightly above year-ago.
  • Strength in the corn market is likely to pressure feeder cattle.

 

Lean hog futures are called lower on followthrough selling amid supply concerns.

  • Lean hog futures closed low-range Wednesday, which is likely to attract followthrough selling interest this morning. But the big discount fall- and winter-month contracts hold to the cash index could limit selling pressure.
  • Fundamental concerns are tied to supplies. Traders continue to fear high prices will lead to herd liquidation and increase pork supplies at a time when supplies are building seasonally.
  • Cash hog bids are called steady to lower on limited packer demand as plants are well booked on near-term slaughter needs.
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