Market Snapshot, 8:30 am CT (VIP) -- January 31, 2013

January 31, 2013 02:46 AM
 

Corn futures are 2 to 4 cents lower on spillover from neighboring pits and profit-taking.

  • Following yesterday's bullish reversals in many contracts, corn futures are softer on spillover from double-digit losses in soybean futures and on profit-taking.
  • This morning's weekly export sales data didn't help bulls' case any, as sales of 186,800 MT for 2012-13 and sales of 66,500 MT for 2013-14 came within expectations.
  • However, the report showed China purchased 107,500 MT, including switches from unknown destinations.
  • Gulf corn basis is a penny firmer for nearby delivery at 53 cents above March futures. This hints that demand has improved, but also reflects a tight supply situation.

 

Soybean futures are 6 to 9 cents lower, with nearbys leading losses amid profit-taking.

  • Following yesterday's sharp gains, soybean futures are weaker amid profit-taking pressure.
  • So far, traders have put the weekly export sales data to the backburner as they focus on taking profits. But continued strong demand could return as the focus to support the market at any point today.
  • Weekly export sales of 386,000 MT for 2012-13 and 867,000 MT for 2013-14 came in well above expectations, with China as the lead buyer for both marketing years.
  • Also this morning, USDA announced that China has purchased another 220,000 MT of 2013-14 soybeans.

 

Wheat futures are 3 to 5 cents lower on spillover from neighboring pits.

  • Wheat is also seeing profit-taking pressure as the market remains in a follower's role to corn and soybeans.
  • Weekly exports sales of 293,600 MT for 2012-13 and 94,300 MT for 2013-14 came in at the low end of expectations.
  • Meanwhile, Ukraine's ag ministry is reportedly urging exporters to halt wheat exports and refrain from additional exports as it could violate the current agreement.
  • Also, Russia's deputy prime minister will reportedly discuss lifting its grain import duty tomorrow.

 

Live cattle futures are called mixed as traders begin to more actively even positions ahead of tomorrow's Cattle Inventory Report.

  • Traders will be focused on evening positions ahead of tomorrow's semi-annual Cattle Inventory Report, which is expected to show all cattle and calves at 98.2% of year-ago levels and that heifer retention has not yet begun.
  • Meanwhile, traders are disappointed by $2 to $3 higher cash cattle trade that began yesterday in the Southern Plains at $125. Traders had factored even higher cash cattle trade into futures, although this signals a cash low has been posted.
  • Also, boxed beef prices were softer again yesterday, with Choice values declining by around $7 the past two weeks. Beef movement, however, has picked up, which signals a near-term low may be near.

 

Lean hog futures are called steady to weaker in reaction to the pork cutout market.

  • Pork cutout values slipped $1.12 yesterday to push packers profit margins back into the red after they briefly were near breakeven.
  • As a result, the cash hog market is expected to be mostly steady amid varied demand. But many plants are still in need of hogs after some weather-related closures yesterday.
  • February lean hog futures are trading at around a dollar discount to the cash index, which should limit pressure on futures.

 

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