Market Snapshot, 8:30 am CT (VIP) -- November 19, 2012

November 19, 2012 02:41 AM
 

Corn futures are 2 to 5 cents higher on support from outside markets.

  • A "risk-on" environment is lifting grain futures this morning. Weakness in the U.S. dollar index comes as investors expect the Obama administration and Congress to strike a deal after the Thanksgiving break to avoid going over the so-called fiscal cliff.
  • Ongoing delays at Brazil's ports due to congestion is also supportive for corn futures this morning, as traders expect the U.S. to garner more of the diverted business. Export sources say as much as 1.5 MMT of corn shipments from Brazil has been delayed -- the bulk to Asian buyers.
  • Otherwise, expect quiet, pre-holiday trade ahead of Thanksgiving.

 

Soybean futures are 10 to 13 cents higher on corrective short-covering.

  • Positive outside markets are spurring short-covering in the soybean market following last week's sharp losses that produced heavy chart damage.
  • China says it will temporarily suspend auctions of soybeans from state reserves as it starts to stockpile new-crop soybeans. As a result, traders look for China to fill near-term demand with U.S. supplies.
  • USDA announced a 20,000 MT soyoil sale to an unknown destination for 2012-13, which traders suspect is China.

 

Wheat futures are 2 to 5 cents higher in Chicago and mostly 1 to 3 cents higher in Kansas City and Minneapolis.

  • With little fresh news for traders to digest, wheat is seeing a boost from neighboring markets and weakness in the dollar.
  • Traders continue to point to tight exportable supplies in the Black Sea region, although this hasn't shifted demand to the U.S. as importers seek other more cost-competitive supplies.
  • Ukraine continues to actively sell wheat ahead of its expected Dec. 1 halt on exports. The Ukraine Agrarian Confederation says 900,000 MT of wheat were exported the first half of November.

 

Live cattle futures are called to open steady to firmer on help from outside markets.

  • The U.S. stock market is firmer amid rising hopes lawmakers will come to an agreement on avoiding the fiscal cliff, although they remain on vacation for Thanksgiving.
  • Friday's Cattle on Feed Report came in about as expected, which is supportive for deferred futures as it reflects a tightening supply situation.
  • The bulk of last week's cash cattle trade came in steady with the previous week late on Friday at $125 and $126. With December live cattle trading in line with the cash market, traders will turn their attention to the boxed beef market to start the week for cash clues.

 

Lean hog futures are called to open steady to firmer on help from outside markets.

  • Weakness in the U.S. dollar index and strength in the U.S. stock market are seen as supportive of general commodity buying this morning.
  • Traders are also hopeful the pork product market is working on a near-term low as the pork cutout value rose 93 cents on Friday to lift packers' profit margins.
  • The cash hog market is expected to be mostly steady to start the week, but limited demand due to the holiday could cause some locations to lower bids.
  • December lean hog futures hold a small premium to the cash market, which will limit buying in nearby contracts.
     
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