Market Snapshot, 8:30 am CT (VIP) -- November 20, 2012

November 20, 2012 02:48 AM
 

Corn futures are 1 to 2 cents lower on profit-taking and negative outside markets.

  • Corn futures haven't strayed too far from unchanged yet today, but are favoring a weaker tone on profit-taking following yesterday's gains.
  • Negative outside markets are weighing on corn as the "risk-on" attitude has faded.
  • Gulf corn basis is up sharply again this morning, which raises expectations fresh export business will be announced soon. Congestion at Brazil's ports has many importers looking elsewhere to meet their near-term feed needs.
  • Traders are also focused on evening positions as many will take an extended break around Thanksgiving.

 

Soybean futures are 6 to 15 cents lower on profit-taking and negative outside markets.

  • Soybean futures have more than erased yesterday's gains due to strength in the U.S. dollar index. Renewed concerns about the euro-zone debt crisis has spurred "safe-haven" buying that is bolstering the dollar.
  • Gulf soybean basis is up 4 to 9 cents for nearby delivery, raising speculation China is back buying U.S. soybeans.
  • However, traders have returned their focus to the improved outlook for South American soybean production. Rains in Brazil's tropics have traders looking for a record crop to help offset tight U.S. supplies later this winter.

 

Chicago and Kansas City wheat futures are mostly 1 to 2 cents lower, with Minneapolis mostly 1 to 5 cents lower on spillover from soybeans.

  • Pressure on Kansas City wheat is being limited by yesterday's crop condition ratings, which reflected ongoing stress to the crop from the drought in the Plains.
  • But buying is being limited by weakness in neighboring markets and from negative outside markets amid renewed euro-zone debt worries.
  • Wheat needs a dose of fresh export business to boost buying, which may be on the horizon as exportable supplies in the Black Sea region are running thin.
  • Last week Egypt removed Ukraine from its potential list of wheat suppliers, but now Ukraine has asked Egypt to keep it on its list of suppliers. This is creating confusion regarding Ukraine's exportable wheat supply.

 

Live cattle futures are called to open mixed as traders even positions ahead of Thanksgiving.

  • Many traders will move to the sidelines as they prepare for an extended Thanksgiving break. As a result, choppy trade is possible as the focus will be on position squaring.
  • But selling should be limited by indications retailers are preparing for a round of post-holiday beef features. Choice beef values rose $1.15 yesterday on strong movement of 237 loads, with Select cuts down 11 cents.
  • This week's cattle showlist is thought to be smaller than last week, but demand for cattle may be limited as packers may wait until after Thanksgiving to assess needs.

 

Lean hog futures are expected to see a choppy start following yesterday's gains.

  • Nearby lean hog futures are vulnerable to profit-taking following yesterday's gains, especially with December now trading at a premium to the cash index.
  • But pressure on deferred futures will be limited by expectations supplies will begin to tighten after the holidays.
  • The cash hog market is called steady to lower as packers work to improve profit margins. The pork cutout value slipped 60 cents yesterday.
     
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