Market Snapshot, 8:30 am CT (VIP) -- November 13, 2012

November 13, 2012 02:41 AM
 

Corn futures are 1 to 3 cents higher, although price action has been choppy.

  • Buying in the corn market is subdued ahead of the start of open-outcry trade after favoring a firmer tone overnight on ideas yesterday's losses were overdone.
  • The U.S. dollar index hit a two-month high overnight, which is limiting buying in the commodity world. Dollar bulls have near-term momentum on their side.
  • Traders are generally ignoring news of a 158,496-MT corn sale to an unknown destination for 2012-13, as they suspect this is part of the business to Japan that was factored into prices last week.
  • No further technical chart damage was done overnight, as futures respected support at yesterday's lows.

 

Soybean futures are 3 to 9 cents higher on short-covering following yesterday's sharp, technically inspired losses.

  • Following yesterday's sharp losses, which were partly due to sell stops being triggered as support levels were violated, soybeans are enjoying light short-covering.
  • But buying is being limited by strength in the U.S. dollar index as traders keep a close eye on global and U.S. economic concerns.
  • Traders are also watching weather conditions in South America closely. Weather-watchers say while the rainy season was delayed in Brazil's tropics, it has finally arrived and that's boosting crop prospects.
  • Soybean futures are hovering just above support at yesterday's lows. Violation of these levels could trigger another wave of sell stops.

 

Chicago and Kansas City wheat are 1 to 2 cents lower, with Minneapolis contracts slightly firmer on short-covering.

  • Price action is choppy as traders weigh negative outside markets against crop concerns.
  • This afternoon's weekly crop condition data from USDA is expected to reflect further deterioration in the condition of the winter wheat crop.
  • Ukraine's wheat exports are near the 5.5 MMT cap promised by the government. An official announcement on whether the country will ban exports is expected soon.

 

Live cattle futures are called to open mixed as traders wait on confirmation the boxed beef market has posted a near-term low.

  • Live cattle futures are expected to be choppy today as traders watch for cash clues. Limiting pressure will be yesterday's firmer boxed beef market. Choice values rose $1.43 and Select was up 15 cents on solid movement of 157 loads.
  • This week's cattle showlist is up from last week and packer margins remain deep in the red. That combination will make it more difficult for feedlots to garner steady to higher bids compared to last week's $124 to $125 trade.
  • Traders will also begin to prepare for Friday's Cattle on Feed Report, which will reflect the tightening supply situation.

 

Lean hog futures are called mixed amid spreading.

  • Hog futures are expected to see a choppy start amid spreading, with pressure on nearby contracts limited by the discount December hogs hold to the cash index.
  • However, yesterday's 90-cent drop in the pork cutout value has traders looking for steady to weaker cash hog bids again today as packers work to keep profit margins in the black. Packers are having no difficulty securing needed supplies.
  • Expected weakness in the U.S. stock market could provide spillover pressure to the livestock markets today, as traders worry economic concerns will make consumers more cautious at the meat counter.
     
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