Market Snapshot, 8:30 am CT (VIP) -- December 28, 2012

December 28, 2012 02:44 AM
 

Corn futures have weakened slightly to narrowly mixed trade.

  • Corn hasn't strayed too far from unchanged yet today, but futures are trading near session lows ahead of the start of open-outcry trade due to strength in the dollar index.
  • Additional pressure is coming from a weaker-than-expected weekly export sales tally of 104,300 MT, which is down 37% from the four-week average.
  • Traders are also keeping a close eye on Gulf and interior basis levels, which slipped yesterday due to an increase in corn movement across the country.

 

Soybean futures are off session highs with gains of 4 to 6 cents on short-covering.

  • So far soybean futures have remained confined within the boundaries of yesterday's trading range and are being supported by short-covering.
  • But buying is light as export demand has slowed. This morning's weekly export sales data showed net sales of just 87,000 MT -- coming in below light expectations.
  • But also this morning, USDA also announced soybean sales of 165,000 MT to China and soyoil sales of 30,000 MT to unknown -- all for 2012-13.
  • Gulf basis is steady to 3 cents higher for immediate delivery, which suggests an uptick in demand.


Wheat futures have firmed to trade mostly 5 to 6 cents higher on stronger-than-expected weekly export sales.

  • Wheat futures were supported by short-covering overnight and have moved to fresh session highs on a strong weekly export sales tally.
  • Weekly export sales of 1.009 MMT were well above expectations and suggest U.S. prices are once again competitive on the global market. Egypt, which is known as a value buyer, topped the list of buyers.
  • But wheat futures have a lot of work ahead in order to signal a near-term low has been posted. More technical chart damage has been done this week. March Chicago wheat needs to return above the psychological $8.00 to hint that a low is in the works.

 

Live cattle futures are called steady to weaker as traders are cautious about the cash market.

  • Light cash cattle trade was seen in Nebraska yesterday at $127, which is up $1 from last week. But traders say this doesn't necessarily mean higher trade will be seen throughout the Plains, especially if futures weaken again today.
  • Nearby live cattle futures are trading at nearly a $2 premium to cash, which is expected to weigh slightly on futures.
  • The boxed beef market has been strong this week, which could force packers to raise bids. Yesterday, Choice boxed beef prices rose 2 cents and Select rose 30 cents on solid movement of 217 loads.
  • Traders will also be watching the stock market as investors remain on edge about the fiscal cliff.

 

Lean hog futures are called mixed as traders even positions ahead of this afternoon's Hogs & Pigs Report.

  • Traders expect this afternoon's Quarterly Hogs & Pigs Report to show all major categories below year-ago levels. This should provide spur some short-covering.
  • But upside potential will be limited after pork cutout values slipped $1.14 yesterday to push packers' profit margins back into the red.
  • The cash hog market is expected to be mostly steady, with the possibility of mixed bids due to variable demand.
  • Upside potential will also be limited by the premium nearby futures hold to the cash index.
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