Market Snapshot, 8:30 am CT (VIP) -- January 17, 2013

January 17, 2013 02:43 AM
 

Corn futures were lifted by the weekly export sales data, but they are now trading 2 to 4 cents lower.

  • Corn initially improved in reaction to this morning's weekly export sales data that showed sales of 393,300 MT for 2012-13, which were above expectations.
  • Mexico was the lead buyer, followed by unknown destinations, Japan and China.
  • Gulf corn basis is steady to 2 cents lower for nearby delivery and 1 to 4 cents higher for April and May delivery.
  • March corn futures are pivoting around $7.30 for the third straight day.

 

Soybean futures moved into positive territory following the release of weekly sales data and are now trading mixed.

  • After seeing a softer price tone overnight, nearby soybean futures have improved to trade 1 to 4 cents higher in reaction to the weekly export sales data. The report showed a new marketing year high in sales of 1,608,800 MT for 2012-13; sales of 180,000 MT were reported for 2013-14. China was the lead buyer of 1,025,600 MT in sales.
  • USDA also announced a daily soybean sale of 240,000 MT to unknown destinations for 2013-14 this morning.
  • Traders also have Argentine weather concerns on their minds. After a too-wet start of the growing season, drought concerns are now raising concerns about the crop.
  • March soybean futures are testing the psychological $14.50 level.

 

Wheat futures at all three locations are favoring a weaker tone.

  • Wheat futures moved off session lows as corn and soybean futures were lifted by weekly export sales data. But buying is limited in wheat futures as sales were within expectations.
  • Weekly wheat sales of 536,200 MT for 2012-13 and 38,500 MT for 2013-14 were led by increases to Egypt and China.
  • The extended weather outlook is also concerning for HRW wheat crop prospects, as the 90-day outlook calls for below-normal precip from Kansas south.
  • Also supportive is news private EU firm Strategie Grains has cut its 2013-14 EU-27 wheat crop forecast by around 2 MMT to 132.3 MMT due to lower planted area.

 

Live cattle futures are called steady to lower based on a weaker start to cash cattle trade.

  • Live cattle futures are vulnerable to followthrough pressure after yesterday's losses, although some short-covering is also due as the market is working on sharp weekly losses.
  • News of $125 cash cattle trade in Kansas and Texas yesterday is expected to weigh on nearby futures, as February cattle are still trading at more than a $3 premium to the cash market.
  • But ultimately, pressure should be limited by the tight supply situation.

 

Lean hog futures are called mixed, with pressure limited by improvement in the pork market.

  • Lean hog futures are expected to be choppy today as traders reevaluate positions.
  • Pressure will be limited by improvement in the pork market, although buying will be capped by weakness in live cattle futures.
  • Pork cutout values firmed 49 cents and movement was strong yesterday. But the cash market is still expected to be mostly steady today as packers say supply and demand are well balanced this week and they continue to deal with negative profit margins.
  • February lean hog futures are trading at a slight premium to the cash index, which should limit price movement.
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