Market Snapshot, 8:30 am CT (VIP) -- December 6, 2012

December 6, 2012 02:35 AM

Corn futures are 2 to 3 cents lower on a disappointing weekly export sales tally.

  • Futures have softened from earlier levels due to disappointment this morning's weekly export sales data showed sales well below expectations. Sales of 51,600 MT for 2012-13 and net sales reductions of 4,200 MT were a big disappointment.
  • Additional pressure is coming from a firmer dollar as investors react to news GDP in the euro-zone shrank by 0.1% in the 3rd quarter.
  • Conab projects Brazil's corn crop at 71.9 MMT, near the bottom of its previous crop range of 71.6 MMT to 72.9 MMT.
  • Meanwhile, Gulf corn basis is steady to firmer for February and March delivery, which reflects a tight supply situation.

Soybean futures are 2 to 10 cents higher, with nearbys supported by a stronger-than-expected weekly export sales tally.

  • Nearby soybean futures extended gains following this morning's weekly export sales data that showed sales well above expectations. Sales of 1,142,700 MT for 2012-13 and 1,100 MT for 2013-14, with China again the lead buyer, remind the market that current prices are not adequately rationing supplies.
  • Conab projects a record Brazilian soybean harvest of 82.6 MMT, saying conditions are favorable in all but Rio Grande do Sul, where rains are needed. Previously, Conab pegged the crop between 80.1 MMT and 83 MMT.
  • January soybeans are pivoting around $14.90. Closes above $15.00 are needed to signal a near-term low has been posted.

Wheat futures are favoring a firmer tone in mixed trade at all three exchanges.

  • Wheat is being tugged by weakness in the corn market and strength in the soybean market to result in a choppy tone. Strength in the dollar is also limiting buying.
  • But ongoing concerns about drought in the U.S. Southern Plains keeps crop concerns front-and-center on traders' minds. This morning's National Drought Monitor reflects worsening drought in the HRW wheat belt.
  • But to re-ignite market bulls, improvement in the export market is needed. Weekly sales of 353,100 MT were a disappointment, as the tally came in below traders' expectations.

Live cattle futures are called lower on concerns about beef demand.

  • Cash cattle trade will likely be delayed until tomorrow, as feedlots balked at packers' initial bids of $123. Cash sources are still hopeful they will move cattle at steady money with last week's $125 to $126 trade.
  • But given this week's larger showlist and decline in boxed beef prices compared to week-ago levels, garnering steady cash trade could be too optimistic.
  • Weekly beef sales of 14,000 MT for 2012 were an improvement from last week's tally of 11,800 MT.

Lean hog futures are called lower amid profit-taking on concerns about packers' profit margins.

  • The cash hog market is expected to be mostly steady today, with some weaker tones possible as packers work to improve negative profit margins.
  • Packers say they have supplies secured for a large Saturday kill, which signals reduced demand for cash supplies the remainder of the week.
  • December lean hog futures are trading at around a dollar premium to the cash index ahead of next week's expiration. February lean hog futures are trading at around a $2 premium to the index and will have the responsibility of following the cash market more closely once December expires.
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