Market Snapshot, 8:30 am CT (VIP) -- August 6, 2012

August 6, 2012 03:35 AM
 

Corn is 7 to 11 cents lower on better-than-expected weekend rains.

  • Weekend rains were more widespread than expected, and while the event will not provide much help to the ailing corn crop, it makes it more difficult for futures to rally.
  • Traders expect this afternoon's crop condition data to show further declines in the corn crop as it speeds toward harvest due to widespread drought conditions.
  • Strength in the U.S. dollar index is also negative for commodity markets this morning.

 

Soybeans are 20 to 40-plus cents lower after widespread weekend rains.

  • Rains over the weekend were more widespread and heavier than forecasters predicted, leading to hope more will come during the critical pod-filling stage of development. Traders are watching to see if this afternoon's crop condition report shows rains stabilized the crop.
  • The China National Grain and Oils Information Center expects the country's bean imports to fall to 4.5 million metric tons (MMT) in August and to less than 4 MMT in September and October due to high international prices.
  • USDA announced a 106,000-metric-ton (MT) soybean sale to China for 2012-13.

 

Chicago and Kansas City wheat are mostly 5 to 10 cents lower, with Minneapolis turning mixed after a firmer start.

  • Chicago and Kansas City futures are seeing spillover pressure from neighboring markets and a firmer dollar.
  • Minneapolis wheat favored a firmer tone overnight on short-covering and expectations demand for high-quality wheat will remain strong due to concerns about crop quality in Europe. But spillover from Chicago and Kansas City wheat,along with a firmer dollar are now weighing mildly on most contracts.
  • Private firm SovEcon lowered its Russian wheat production estimate to 40.5 MMT to 43 MMT from 46 MMT previously.

 

Live cattle futures are called mixed as traders wait to form cash opinions.

  • August live cattle are trading at around a $2 premium to last week's $118 cash trade. To build on last week's cash improvement, the boxed beef market must strengthen.
  • The U.S. stock market is expected to extend Friday's rally as investors welcome the better-than-expected jobs report and easing costs of borrowing in Spain and Italy.
  • Feeder cattle futures should be supported this morning by weakness in the corn market.

 

Lean hog futures are called to open mixed amid uncertain cash hog trade.

  • The cash hog market is expected to be mostly steady this morning, with sources saying some weaker bids could be seen as supplies are plentiful to start the week.
  • Packer margins have returned to the black, but demand for cash supplies isn't expected to strengthen unless late-week supplies tighten.
  • Pressure on nearby futures should be limited by the discount they hold to the cash index.
     
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