Market Snapshot, 8:30 am CT (VIP) -- November 21, 2012

November 21, 2012 02:39 AM
 

Note: Grain and livestock markets will observe normal trading hours today ahead of the Thanksgiving holiday.

Corn futures are trading mostly around a penny higher on light followthrough buying.

  • Corn futures are building on price gains earlier this week. Technical-based buying is providing much of the support.
  • Thin holiday trade could lead to volatile price action as it won't take as much to get the market moving -- in either direction.
  • Gulf basis is firmer again this morning, but it is not showing the kind of strength seen earlier this week. Logistical problems and tight supplies are fueling the basis strength.

 

Soybean futures are mostly 4 to 6 cents higher, although some of the extreme far-deferred contracts are posting lesser gains.

  • Fresh demand news is giving soybeans (and soyoil) a boost this morning. USDA announced daily sales of 120,000 MT of soybeans to China, 20,000 MT of soyoil to China and 56,000 MT of soyoil to unknown destinations -- all for 2012-13 delivery.
  • Traders also continue to cover short positions after the recent, sharp price drop.
  • Gulf basis is steady to modestly firmer again this morning, although the cash market isn't as strong as recent days.

 

Wheat futures are mostly 1 to 3 cents higher at all three exchanges after showing a mixed tone through the overnight hours.

  • Wheat futures are benefiting from a firmer tone in the corn and soybean markets. This mild spillover support has allowed wheat futures to firm a little.
  • The U.S. dollar index is now mildly weaker after trading higher for much of the overnight hours. This has also allowed wheat to poke above unchanged.
  • Dryness concerns in the Plains remain a concern, although recent price action signals traders aren't overly concerned at this stage.
  • Limiting buying interest is news Russia's deputy ag minister raised the ceiling on grain exports for 2012-13 to 15.5 MMT. That signals Russia will continue to export wheat despite tight supplies.

 

Live cattle futures are expected to open with a mixed to mostly firmer tone. Feeder cattle are seen opening mixed.

  • Cattle traders are still waiting on cash cattle trade to develop. But with bids and asking prices still far apart, active cash trade isn't likely until Friday unless packers raise cash cattle bids above last week's $125 to $126 prices in the Plains.
  • While cash cattle trade is still up in the air, most traders expect steady to firmer prices compared with week-ago as showlist numbers are lighter and packers will need supplies for a full slaughter schedule.
  • December live cattle futures are trading at a slight premium to the top end of last week's cash range. With mild cash optimism already built into futures, buying interest is likely to be limited today unless active buy stops are triggered.
  • Early buying interest in feeder cattle will be limited by mild strength in corn.

 

Lean hog futures are called to open mixed in thin, pre-holiday trade.

  • Trading volume is expected to be light ahead of Thanksgiving as some traders will opt to take an extended vacation.
  • Traders also aren't likely to add new positions ahead of this afternoon's Cold Storage Report, which is expected to show record-large pork stocks for the end of October.
  • Cash hog bids are steady to weaker across the Midwest on limited packer demand. But there is some hope cash hog bids could firm after Thanksgiving if plants are short-bought on slaughter needs.
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