Market Snapshot, 8:30 am CT (VIP) -- December 11, 2012

December 11, 2012 02:43 AM
 

Corn futures are 1 to 5 cents lower following USDA's reports.

  • While USDA left its 2012-13 corn carryover peg unchanged at 647 million bu., (traders expected a slight increase due to lackluster export demand), traders' reaction to USDA's data is limited.
  • USDA trimmed its global 2012-13 carryover projection marginally to 117.61 MMT, which is down sharply from 131.04 MMT last season.
  • Traders' muted reaction to this morning's report serves as a reminder the market needs fresh demand news to excite bulls, especially since we've entered the traditional "holiday doldrums."

 

Soybean futures are mostly 3 to 5 cents lower as USDA's report data failed to excite market bulls.

  • While USDA trimmed carryover by 10 million bu. to 130 million bu., traders are disappointed USDA left its export forecast unchanged, although it increased crush.
  • Pressure is being limited by ongoing strong demand, as USDA announced another daily soybean sale to China this morning. The sale is for 115,000 MT for the 2012-13 season.
  • Soybean futures have moved off their post-report reaction low to trade mid-range.
  • Weakness in the U.S. dollar could trigger buying in the commodity markets this morning.

 

Chicago and Kansas City wheat futures are posting double-digit losses in the lower teens, while Minneapolis is around 10 to 12 cents lower.

  • Futures are lower this morning in reaction to USDA's higher-than-expected carryover peg of 754 million bushels. The estimate is 50 million bu. above last month and traders expected only around a 14-million-bu. increase.
  • Traders are largely disappointed that USDA trimmed its export forecast by 50 million bu. from last month to reflect the sluggish export pace.
  • USDA raised its 2012-13 global carryover peg nearly 3 MMT from last month to 176.95 MMT, but that is still down from 195.77 MMT last season.

 

Live cattle futures are expected to open mixed. Feeder cattle are also called mixed, but could get a boost from mild weakness in corn.

  • Live cattle futures are expected to see a choppy start as traders wait on clearer direction from the cash market.
  • Boxed beef prices were firmer yesterday, but only 150 loads changed hands. This signals retailers have holiday purchases booked, which could also limit packers' demand for cattle this week.
  • This week's cattle showlist is tighter than last week in all but Texas, where feedlots did not get current on last week's lower cash trade.
  • Feeder cattle futures are expected to benefit from weakness in the corn market.

 

Lean hog futures are expected to be mixed, with pressure limited by the discount nearby contracts hold to the cash index.

  • December lean hog futures are trading at about a $3.50 discount to the cash index, which opens the door to short-covering ahead of Friday's expiration.
  • But buying will be limited by calls for steady to $1 lower cash hog bids as packers work to improve profit margins.
  • The pork cutout value slipped 59 cents yesterday, with only 40.25 loads changing hands. Traders say this signals retailers have holiday purchases booked.
     
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