Market Snapshot, 8:30 am CT (VIP) -- December 14, 2012

December 14, 2012 02:49 AM
 

Corn futures are mixed, with the December through July contracts 1 to 2 cents higher and deferreds mostly 1 cent lower.

  • Pressure on corn is being limited by strength in soybeans and slight weakness in the dollar index.
  • Traders continue to digest news South Korea has purchased 630,000 MT of optional origin corn this week -- likely from South America. The purchases follow others by end users seeking alternatives to higher-priced U.S. corn.
  • Sharp pressure on Gulf corn basis reflects ongoing demand destruction. Basis for immediate shipment is 10 cents weaker this morning and 6 cents weaker for January shipment.
  • News that China has rejected two Argentine corn shipments is contributing to a firmer tone, as it raises questions about the quality of Argentina's corn supply.

 

Soybean futures are 4 to 12 cents higher, with nearbys leading gains amid ongoing strong demand.

  • NOPA reports soybean crush in November of 157.308 million bu., which came in line with traders' expectations, although it represents a 2.5% increase from the previous month and is 11.3% stronger than last year's tally. Soyoil stocks of 2.385 billion lbs. were above traders' expectations.
  • Traders still have yesterday's stronger-than-expected weekly export sales tally on their minds, although this is being weighed against expectations Brazil will have soybeans in exportable position in about a month.
  • Outside markets are also contributing to gains in the soy complex, as is news of improvement in China's manufacturing sector.

 

Chicago wheat futures are 3 to 8 cents higher. Kansas City and Minneapolis futures are mostly 2 to 7 cents higher.

  • Nearby wheat futures are seeing a short-covering boost on ideas this week's losses are overdone. But buying has been limited as bulls' confidence in the market has declined.
  • Wheat futures need a dose of fresh demand news to lift traders' confidence, especially after USDA trimmed its 2012-13 export projection by 50 million bu. earlier this week.
  • Additional light support for wheat futures is also coming from spillover from neighboring pits and light pressure on the dollar index.

 

Live cattle futures are called mixed as traders wait on active cash trade to begin.

  • Buying in live cattle futures will be limited after Choice beef values slipped $1.27 yesterday, which puts the possibility of higher cash cattle trade in question. Select values were up 34 cents and movement was strong at 209 loads.
  • December live cattle ended yesterday at around a $2 premium to last week's cash trade, which raises the risk of light profit-taking this morning, although it also signals traders have a positive bias toward this week's cash prospects.
  • Feeder cattle futures are expected to be mixed due to the choppy tone in the corn market.

 

Lean hog futures are called mixed as traders even positions ahead of the weekend and gauge next week's cash prospects.

  • The cash hog market is expected to be mostly steady today, as packers are working on securing next week's supplies.
  • Pork cutout values firmed 25 cents yesterday on solid movement of 80 loads to halt this week's slide in the pork market. Packers' profit margins remain in the black, but they have tightened.
  • December lean hogs expire at noon CT today and yesterday ended the day at about a $1 discount to the cash index. February hogs soon hold the responsibility of following the cash market and are trading at around a $2.50 premium to the cash index.
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