Market Snapshot, 8:30 am CT (VIP) -- November 12, 2012

November 12, 2012 02:29 AM
 

Corn futures are 3 to 4 cents lower on spillover from soybeans.

  • Corn was choppy much of the overnight session but is weakening this morning on heavy spillover pressure from soybeans.
  • Traders also still have Friday's higher-than-expected carryover peg by USDA on their minds, although they remember how futures firmed to end last week due to news Japan has stepped up its purchases of U.S. corn due to shipping delays in Brazil.
  • Raising thoughts that other importers are also looking to book U.S. corn is the steady to firmer tone this morning in Gulf corn basis.
  • While markets are open today, USDA is closed in observance of Veterans Day. As a result, export inspections and weekly crop progress data has been delayed until tomorrow.

 

Soybean futures are 16 to 28 cents lower on active followthrough selling amid technical selling and improved weather in Brazil.

  • Soybeans are seeing followthrough selling from Friday's sharp losses, as traders still have USDA's bigger-than-expected crop and carryover projection on their minds.
  • Improving weather conditions in northern production areas of central and eastern Brazil are helping to alleviate concerns about drought there and wet conditions in Argentina point to acres being shifted to soybeans.
  • Technically, there is significant downside risk for the market as futures filled the early July gap area on Friday and are seeing followthrough selling today.
  • According to official Chinese customs data, the country imported 4.03 MMT of soybeans in October, a 19% decline from September, but 6% above year-ago.

 

Wheat futures are mostly 8 to 9 cents lower in Chicago and Kansas City, while Minneapolis wheat is 5 to 6 cents lower.

  • A combination of spillover from soybeans and corn, and a lack of fresh news is pressuring wheat futures, although no technical chart damage has been done.
  • USDA raised wheat carryover more than expected Friday, although concerns about the U.S. HRW wheat crop are helping to keep losses in check.
  • USDA's weekly crop condition data, which is expected to reflect further deterioration in the condition of the winter wheat crop, is delayed until tomorrow due to Veterans Day.
  • Wheat remains within the boundaries of the multi-month, choppy consolidation range, with December Chicago wheat pivoting around $8.80.

 

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

  • Live cattle are expected to be mixed as traders wait on cash signals to emerge. But given the fact packers' profit margins are deep in the red, they will want to see the boxed beef market improve before raising bids.
  • On Friday, Choice values slipped $1.37 and Select was down $2.39. But improved beef movement last week signals pressure on prices may soon ease.
  • The U.S. stock market is expected to be firmer this morning on ideas last week's losses were overdone.
  • Traders will also begin to prepare for Friday's Cattle on Feed Report, which will reflect the tightening supply situation.
  • Feeder cattle futures are expected to be steady to firmer this morning in reaction to weakness in the grain markets.

 

Lean hog futures are called mixed amid spreading.

  • Pressure on nearby lean hog futures should be limited by the $1.50 discount the December contract holds to the cash index.
  • However, the cash hog market is called steady to $1 lower due to plentiful supplies, as packers say they will have no difficulty securing needed supplies.
  • Packers saw profit margins improve last week, which should give them encouragement to keep kill lines running as full as possible as supplies increase.
  • Weakness in the corn market could trigger some short-covering in hog futures.
     
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