Market Snapshot, 8:30 am CT (VIP) -- January 22, 2013

January 22, 2013 02:40 AM
 

Corn futures are 2 to 5 cents higher on help from weakness in the dollar index.

  • Weakness in the dollar index is supportive for commodity markets this morning as it is resulting in a risk-taking atmosphere as traders return from their holiday weekend.
  • Also supportive are concerns about dry conditions in Argentina, which are resulting in an uneven start for the country's full-season corn crop.
  • Traders are also taking note the Mexican Federation of Corn Growers says the recent freeze has damaged at least 20,000 hectares (49,421 acres) of grain in Mexico's top corn-producing state of Sinaloa.

 

Soybean futures are 14 to 18 cents higher on concerns about dryness in areas of South America.

  • Warmer and drier conditions across Argentina and southern Brazil (Rio Grande do Sul) are raising concerns about increased stress to crops, while mostly favorable conditions continue across the Brazilian states of Parana and Mato Grosso. Forecasters say late-week rains could be seen across a broad area.
  • Meanwhile, harvest activity will be picking up across northern Brazil in the near-term, which will ease demand for U.S. soybeans.
  • USDA also announced a daily sale of 120,000 MT of optional-origin soybeans to China for 2013-14.

 

Wheat futures are mostly 3 to 5 cents higher at all three exchanges on weakness in the dollar.

  • A combination of dollar weakness and spillover from neighboring pits is providing wheat futures a lift this morning.
  • Also supportive is ongoing dryness in the U.S. Southern Plains.
  • Talk that Russia may lift grain import duties is also supportive as doing so could boost demand for U.S. wheat. But Russia's Deputy Prime Minister Arkady Dvorkovich said he does not support lifting the import duty, however.

 

Live cattle futures are called to open steady to firmer on ideas last week's losses were overdone.

  • Cattle futures are due for a round of short-covering following last week's sharp losses.
  • Traders will be watching the beef market for cash clues, especially since this week's showlist is smaller than last week.
  • Also supportive are indications Japan is closer to easing its age requirement on beef imports -- possibly by next month. This would provide a boost in demand for U.S. beef from the country.
  • Strength in the corn market will make it difficult for feeder futures to generate much more than short-covering support.

 

Lean hog futures are called to open mixed as traders wait on indications of packers' demand for cash hogs.

  • Traders are waiting to get an idea of packers' demand for cash supplies to start the week. Some packers are thought to be short-bought on supplies heading into this holiday-shortened kill week. But others are concerned packers' demand will be lighter due to negative profit margins.
  • February lean hog futures are trading in line with the cash index, which puts more importance on this week's cash trend.
  • Traders will also work to even positions ahead of this afternoon's Cold Storage Report, which is expected to show pork stocks at the end of December down from last month but still up 8.8% from year-ago.
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