Market Snapshot, 8:30 am CT (VIP) -- November 28, 2012

November 28, 2012 02:40 AM
 

Corn futures are mostly 3 to 4 cents lower amid a corrective pullback.

  • Corn futures are mildly pulling back this morning following recent gains as traders put some profits in their pockets. Some of the corrective action is tied to end-of-the-month positioning, which is increasing.
  • Fresh news is limited today, which is also contributing to the weak tone, as are negative outside markets. The U.S. dollar index is firmer and commodities are mostly weaker in general "risk-off" trade.
  • But selling interest in corn futures should be relatively limited by South American crop concerns. Dryness is a rising concern in southern Brazil, while excessive rains continue to delay planting efforts in Argentina.

 

Soybean futures are trading mostly 6 to 9 cents lower on profit-taking.

  • Soybean futures are pulling back this morning after recent gains as traders take profits. Much of the negative tone is coming on influence from outside markets as the U.S. dollar is higher and commodities are under general pressure.
  • USDA announced a daily sale of 290,000 MT of soybeans to China for 2012-13. That should help limit selling pressure.
  • Traders are trying to sort out the South American weather situation. While conditions have improved in Mato Grosso, Brazil, dryness is a concern in southern Brazil. And in Argentina, excessive moisture continues to delay planting efforts, although that likely means some intended corn acres will be switched to soybeans.

 

Wheat futures are 4 to 7 cents lower at all three exchanges.

  • Wheat futures are facing light selling pressure this morning following price strength to start the week. Strength in the U.S. dollar and a broad "risk-off" attitude is helping fuel the negative price tone this morning.
  • Also, Ukraine is now indicating it will allow exporters to continue to ship wheat even though exports have hit the 5.5-MMT cap and the supposed Dec. 1 halt of wheat exports is just days away.
  • Dryness concerns in the Plains are helping limit selling interest. The HRW crop is in need of moisture, but the extended weather outlook offers little hope of drought relief.

 

Live cattle futures are expected to open with a mixed tone as traders assess demand and wait for active cash cattle trade. Feeder cattle futures are also called mixed, although weakness in corn may give the market some support.

  • Traders continue to wait on active cash cattle trade to develop. So far only light cash cattle trade has been seen at steady $128 prices in Texas. Most traders are anticipating firmer cash prices will eventually be seen in the Plains given smaller showlist numbers, although there is some uncertainty.
  • Much of the cash uncertainty is tied to a sluggish performance in the boxed beef market so far this week. After posting solid gains yesterday morning, Choice boxed beef prices ended 77 cents lower for the day.
  • Feeder cattle futures are expected to get little direction from live cattle this morning, although weakness in corn may provide limited support.

 

Lean hog futures are called steady to firmer on fundamental support.

  • Buying interest is expected to return to lean hog futures today on support from strength in the cash and product markets. But negative outside markets may limit buying.
  • Cash hog bids are expected to be steady to higher across the Midwest as packers work to fill late-week slaughter needs. Strong profit margins given them incentive to raise cash bids.
  • The pork cutout value was $1.63 higher Tuesday and packers moved a strong 194.13 loads of product on the day. Strength in the pork product market is supportive for both the cash hog market and lean hog futures.
     
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