Market Snapshot, 8:30 am CT (VIP) -- August 9, 2012

August 9, 2012 03:45 AM
 

September through July corn futures are mostly 5 to 7 cents higher, with far-deferred contracts fractionally to 3 cents lower.

  • December corn has posted a fresh contract high this morning, as traders don't want to be caught short heading into what's expected to be a bullish USDA Crop Production Report tomorrow morning.
  • This morning's weekly export sales data showed corn sales of 174,700 metric tons (MT) for 2011-12 and 928,300 MT for 2012-13 -- matching lofty expectations.
  • The National Drought Monitor shows "extreme" drought has spread across the Midwest, now covering 38.2% of the area, compared to 31.8% last week.

 

August through November beans are 11 to 21 cents higher, with farther deferred contracts 4 to 9 cents higher.

  • Traders are focused on evening positions ahead of tomorrow morning's first survey-based soybean crop estimate. Traders are also anticipating significant cuts to 2012-13 usage projections in the Supply & Demand Report.
  • This morning's weekly export sales report showed soybean sales of 105,200 MT for 2011-12 and 195,200 MT for 2012-13 -- coming in below expectations. However, USDA announced a sale of 165,000 MT to China for 2012-13 to signal the country is still willing to buy U.S. beans at lofty prices.
  • China's consumer price index eased to 1.8% over year-ago last month, increasing expectations the country will further ease monetary policy, which is supportive for commodity markets, including soybeans.

 

Chicago wheat is 5 to 7 cents higher, with Kansas City and Minneapolis wheat futures mostly firmer.

  • Nearby wheat futures are following corn higher, as wheat remains in a follower's role.
  • This morning's weekly export sales data is adding to early support, as sales of 665,300 MT for 2012-13 came in above traders' expectations.
  • Traders don't anticipate a bullish report from USDA tomorrow, as the all wheat crop is expected near month-ago levels and 2012-13 wheat carryover is expected to rise by around 17 million bushels.

 

Live cattle futures are called mixed as traders wait on cash trade to begin. Feeder cattle futures are expected to be pressured by strength in the corn market.

  • All signs point to $1 to $2 higher cash trade compared with last week's $118 trade, as boxed beef prices have strengthened on strong movement and showlists are down slightly from week-ago levels.
  • But with nearby contracts trading at a premium to this week's cash expectations, there is some room for light profit-taking.
  • Weekly beef export sales of 18,500 MT were up 17% from last week.

 

Lean hog futures are called mixed following yesterday's strong gains as followthrough buying competes with profit-taking.

  • Some followthrough buying after yesterday's strong gains is expected as nearby contracts still hold a discount to the cash index, although there are concerns about packer demand.
  • The pork cutout value slipped 32 cents yesterday on moderate movement of 67.5 loads. The cash hog market is expected to be mostly steady today as packers say they are having no difficulty securing needed supplies.
     
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