Market Snapshot, 8:30 am CT (VIP) -- January 4, 2013

January 4, 2013 02:46 AM
 

Corn futures are posting losses of 2 to 5 cents across the board.

  • Nearby corn futures are seeing pressure from a disappointing weekly export sales figure. Sales of 49,100 MT for the week ended Dec. 27 came in well below expectations.
  • Additional weekly exports of 205,300 MT were a new marketing year low.
  • Strength in the U.S. dollar index is also weighing on corn futures, although the dollar has moved well off its earlier session high.
  • March corn futures are working on weekly losses and hovering just above important support at the bottom of the early July gap area.

 

Soybean futures have seen mixed trade, but are currently weaker on negative outside markets.

  • This morning's weekly export sales tally of 434,900 MT for the current marketing year and 61,400 MT for 2013-14 came in above expectations, as it included more sales than cancellations. However, focus is on negative outside markets.
  • Meanwhile, exports of 1,035,600 MT were down 10% from last week, but show that China took delivery on 538,000 MT of soybeans.
  • Traders are also keeping a close eye on the product markets, as spread unwinding of long meal and short soyoil futures has been a featured activity this week.
  • A mostly favorable near-term weather outlook in Brazil is also a limiting factor for soybean futures as traders expect China to begin aggressively booking Brazilian supplies in the near-term.

 

Chicago wheat futures are following corn and are posting losses around 1 to 2 cents. Kansas City and Minneapolis futures are mostly slightly higher.

  • This morning's weekly export sales data showed sales of 434,900 MT for the current marketing year, which came within traders' expectations.
  • However, exports of 158,900 MT were down 63% from the previous week. Overall, the export commitment pace is running 3% behind year-ago and USDA projects exports to be even with the previous marketing year.
  • Chicago wheat futures are following corn futures closely this morning. As a result, key this morning will be if short-covering enters the market at the start of open-outcry trade or if selling picks up due to negative outside markets.

 

Live cattle futures are called mixed with an upside bias due to tightening supplies.

  • With feedlots' asking prices and packers' bids still several dollars apart, cash cattle trade may only be light this afternoon. Expectations are still for $1 to $2 higher cash trade, but if showlists aren't cleaned up, packers will have less urgency to bid up for supplies next week.
  • Futures could also see some followthrough from yesterday's strong gains, although February futures are trading at around a $7 premium to last week's cash cattle trade.
  • Futures could also have a positive bias based on this morning's jobs' report, which is expected to lift the U.S. stock market slightly this morning.

 

Lean hog futures are called steady to higher on strength in the pork market.

  • Hog futures are expected to see a lift from yesterday's $1.71 improvement in pork cutout values, led by hams and bellies. Movement was also impressive at 144.46 loads.
  • Packers saw profit margins improve yesterday, although most are still cutting in the red. As a result, the cash hog market is expected to be mostly steady, which could limit buying in futures.
  • Traders will also be focused on evening positions this first trading week of the year. And with February lean hog futures trading at nearly a $4 premium to the cash index, some profit-taking could be seen.
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