Market Snapshot, 8:30 am CT (VIP) -- December 18, 2012

December 18, 2012 02:46 AM
 

Corn futures are 3 to 8 cents lower on followthrough from yesterday's losses and spillover from soybeans.

  • Improved moisture chances for the Corn Belt are adding to pressure in the corn pit, as a widespread precip event (mostly snow) is forecast to begin tomorrow across the Corn Belt.
  • Traders are also shedding more risk due to lackluster export demand and ahead of year-end; many traders will take extended holiday breaks between Christmas and the start of 2013.
  • March corn is hovering above support at last week's low of $7.15, which if violated, would do technical chart damage and open fresh downside risk for futures.

 

Soybean futures are 12 to 20-plus cents lower on news on soybean sales cancellations, with nearbys leading losses.

  • Soybean futures have weakened on news of soybean sales cancellations of 300,000 MT to China and 120,000 MT to unknown for 2012-13.
  • But USDA also says 110,000 MT of soybeans were sold to unknown destinations for the 2012-13 marketing year.
  • A near daily chance of rain in the forecast for Brazil is also adding to weakness in the soybean pit, as well as forecasts for precip across the Corn Belt this week.
  • Soybean futures are testing uptrending support established from the November lows. If violated, it could trigger sell stops.

 

Chicago and Kansas City wheat are mostly 3 to 5 cents lower, with Minneapolis narrowly mixed.

  • Futures are seeing spillover from neighboring pits and a lack of fresh export news.
  • Additional pressure is coming from more precip chances for the Central Plains as a winter storm moves through today and Wednesday.
  • March Chicago wheat is hovering above last week's low of $8.01 1/2. With little fresh demand news for the market to digest, there is more room to the downside as the market searches for a price that boosts demand.

 

Live cattle futures are called to open mixed as traders await clearer direction from the cash market.

  • Live cattle futures are called mixed on a combination of followthrough buying from yesterday's gains and the risk of profit-taking.
  • This week's cattle showlist is small than last week across the Plains, but to gain on last week's $1 improvement in the cash market, the boxed beef market needs to strengthen.
  • Choice beef values improved 17 cents yesterday and Select declined 89 cents on strong movement to start the week at 173 loads.
  • Feeder futures should be supported by weakness in the grain markets.

 

Lean hog futures are expected to be choppy as traders gauge demand for cash hogs.

  • Lean hog futures could see some short-covering following yesterday's losses, but buying will be limited as traders note the premium nearbys hold to the cash index.
  • Pork cutout values firmed 31 cents yesterday to lift packers' profit margins, although most packers are still cutting in the red. Demand for hogs remains strong ahead of holiday-shortened kill schedules, with mostly steady bids expected today.
  • Expected firmness in the U.S. stock market could also help support livestock futures.
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