Market Snapshot, 8:30 am CT (VIP) -- December 19, 2012

December 19, 2012 02:47 AM
 

Corn futures have improved to narrowly mixed trade, with nearby contracts marginally lower.

  • Corn futures haven't strayed too far from unchanged, with pressure limited by sharp weakness in the U.S. dollar index.
  • Traders are hesitant to do more than cover short positions due to lackluster demand, although steady to firmer basis at the Gulf reminds traders of the tight supply situation.
  • The first major winter storm of the season has begun dumping snow on the Plains and will move into the Corn Belt later today. The much-needed precip is also limiting buying in corn futures this morning.

 

Soybean futures are also mixed, with nearbys favoring the downside.

  • Some short-covering on sharp dollar weakness has lifted soybean futures at times this morning. Weakness in the dollar comes on improved news out of the euro-zone, as Standard & Poor's upgraded Greece's credit rating and Germany's business confidence rating improved.
  • Following yesterday's losses on news of sales cancellations by China and an unknown buyer (likely China), traders are hesitant to do more than cover short positions.
  • Favorable weather across Brazil is also limiting buying interest, although rain-related planting delays in Argentina have raised concern about yield potential for full-season varieties.

 

Wheat futures are 4 to 8 cents higher on ideas U.S. prices have become more competitive.

  • Wheat futures enjoyed short-covering overnight amid dollar weakness, which helps to make U.S. commodities more competitive on the global market.
  • Adding to ideas U.S. wheat is gaining a competitive edge is USDA's announcement of a 110,000 MT HRW wheat sale to Egypt for 2012-13.
  • Key this morning will be if traders extend early gains at the start of open-outcry trade, or if traders focus on improved moisture for the Central Plains.

 

Live cattle futures are called to open steady to weaker on followthrough from yesterday's losses.

  • Futures are expected to see followthrough from yesterday's losses as nearby futures are trading at a premium to last week's cash trade.
  • While expectations are for steady to possibly firmer cash trade due to tightening market-ready supplies on the Southern Plains, packers will be hesitant to raise bids given negative cutting margins.
  • Futures are also expected to be pressured by yesterday's 93-cent decline in Choice beef values, although Select was up 51 cents and movement has been strong this week, with 225 loads changing hands yesterday.
  • The first major winter storm of the season has entered the Plains, which could help attract some short-covering in futures.

 

Lean hog futures are called steady to higher on improvement in the pork market.

  • Lean hog futures should see a lift after pork values improved $1.13 yesterday. Movement was also impressive at 153.25 loads, which suggests retailers are preparing for post-holiday features.
  • The cash hog market is expected to be mostly steady today as packers work to improve margins and say they are having no difficulty securing supplies.
  • Additional support is expected to come from positive outside markets, although weakness in the U.S. dollar index is now spurring widespread commodity buying as traders work to even positions ahead of the holidays.
  • The blizzard warning that is in effect beginning this evening across a large portion of the Midwest is also supportive for futures, as it will disrupt cash hog trade tomorrow.
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