Market Snapshot, 8:30 am CT (VIP) -- December 21, 2012

December 21, 2012 02:48 AM
 

Corn futures are mostly 2 to 5 cents higher, with old-crop contracts leading gains.

  • Corn futures are being supported by short-covering amid ideas losses earlier this week were overdone.
  • In demand news, South Korea purchased 193,000 MT of optional origin corn, including U.S. corn as a potential source. That's a change from the original tender, which excluded U.S. corn as an option.
  • Outside markets and macro-economics could test the early price strength in corn as the U.S. dollar is higher and fiscal cliff talks have stalled -- again.

 

Soybean futures are mostly 10 to 15 cents higher on support from corrective buying.

  • Ideas heavy losses earlier this week were overdone is fueling short-covering ahead of the weekend. The gains are corrective in nature at this time as supportive news is limited.
  • South American growing conditions remain broadly favorable. The forecast calls for limited rainfall chances through next week in northern production areas of central Brazil, while there are better rainfall chances in southern Brazil.
  • USDA announced a correction to an export sale reported earlier this week. The 110,000-MT sale reported Dec. 18 for delivery to unknown destinations was incorrect. Instead of an export sale, it was a domestic sale, which is not covered under the export sales reporting program.

 

Wheat futures are trading mostly 2 to 5 cents higher at all three exchanges.

  • Wheat futures are attempting to rebound this morning following price pressure since last Tuesday. Ideas the downside is overdone is triggering light, corrective buying.
  • Following the price break, exporters indicate U.S. wheat is competitively priced on the global market again. But traders want to see improved export demand before they actively buy futures.
  • Taiwan purchased 75,600 MT of U.S. wheat overnight.
  • A firmer U.S. dollar and ongoing fiscal cliff concerns are limiting buying interest and may cause early price strength to fade.

 

Live cattle futures are expected to open steady lower lower. Feeder cattle are also seen opening with a weaker tone.

  • Live cattle futures are likely to face some price pressure today as price strength earlier this week is seen as overdone given fundamental and macro-economic factors.
  • Traders are preparing for this afternoon's Cattle on Feed Report. While the data is expected to be friendly, traders typically take a cautious approach into these reports.
  • Cash cattle trade started at $126 in Kansas and Texas yesterday, although movement was light. More active trade is expected around this level today.
  • Feeder cattle futures will face pressure from expected weakness in live cattle and strength in corn. Technical-based selling could also weigh on feeder cattle futures.

 

Lean hog futures are expected to open steady to lower this morning.

  • The premium nearby lean hog futures hold to the cash market is likely to weigh on futures this morning, especially since traders fear the cash market may soften through the holidays.
  • Cash hog bids are called mostly steady, although it wouldn't be surprising to see weaker bids develop. Packers are thought to be well bought ahead on slaughter needs for next week given downtime around Christmas. Plus, cutting margins have softened.
  • Traders are also preparing for what is expected to be a negative Cold Storage Report. Pork stocks at the end of November are anticipated to be record large.
  • Outside markets are also price-negative this morning.
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