Market Snapshot, 8:30 am CT (VIP) -- February 8, 2013

February 8, 2013 02:44 AM
 

Corn futures are slightly higher as traders await USDA's reports.

  • Price action is lackluster as traders await this morning's 11:00 a.m. CT release of USDA's February Supply & Demand Report.
  • Traders expect USDA to raise corn carryover by around 13 million bu. from last month due to lackluster demand.
  • Corn futures are working on sharp weekly losses and although no major technical chart damage has been done to old-crop contracts; new-crop December corn has violated the January low.
  • Gulf corn basis is steady to 1 cent higher for nearby delivery and is 58 cents above March futures.

 

Old-crop soybean futures are mostly 2 to 4 cents higher, with new-crop futures mixed.

  • Focus in the market is evening positions ahead of this morning's USDA S&D Report. Traders look for USDA to trim carryover by around 6 million bu. from last month to 129 million bu. due to strong demand.
  • According to official customs data, Chinese soybean imports in January were down 18.8% from the previous month, but up 3.8% from year-ago levels.
  • However, a lull in Chinese demand for U.S. beans is expected in the very near-term as they turn their focus to the availability of Brazilian supplies.
  • But a boost in Gulf soybean basis this morning, which is up 3 cents for immediate delivery, signals demand remains strong for U.S. soybeans.

 

Chicago wheat futures are mostly slightly firmer amid bull spreading. Kansas City and Minneapolis are mostly 2 to 5 cents higher.

  • Chicago wheat is following neighboring pits in choppy trade as traders wait on this morning's USDA S&D Report. Futures are favoring a firmer tone amid short-covering.
  • According to pre-report expectations, traders look for USDA to raise wheat carryover by around 12 million bu. from last month to 728 million bu. to reflect a slowdown in demand.
  • A weaker U.S. dollar index is also supportive of corrective trade in the wheat pit, but without fresh demand news, upside potential will be limited to short-covering.
  • India's 2012-13 wheat crop is expected to slide 2.7% to 92.3 MMT after a record crop the previous year. The country is still ramping up plans to sell wheat onto the world market.

 

Live cattle futures are called to open mixed as traders wait on cash trade to develop.

  • Packers are bidding $1 to $2 lower for cattle and asking prices are above last week's mostly $125 to $126 trade. Traders still expect $1 higher cash trade due to tight supplies.
  • Boxed beef prices were mixed again yesterday, with Choice values down 48 cents and Select up 48 cents on strong movement of 200 loads.
  • February live cattle are trading at around a $2.50 premium to the bulk of last week's cash trade.
  • Feeder cattle futures are working on sharp weekly losses and are expected to be choppy this morning as traders await fresh USDA data.

 

Lean hog futures are called to open steady to lower on concerns about pork demand.

  • The pork cutout value slipped another 72 cents yesterday, but movement improved to 106.83 loads.
  • Packers' profit margins remain deep in the red, reducing demand for cash supplies. As a result, the cash market is called steady to lower again today.
  • February lean hog futures are trading at around a $3.50 discount to the cash index ahead of next week's expiration, which should limit downside risk.
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