Market Snapshot, 8:30 am CT (VIP) -- November 5, 2012

November 5, 2012 02:42 AM
 

Corn futures are mixed, with December through September mostly 1 to 3 cents higher while far-deferred contracts are weaker.

  • Corn is seeing spillover from wheat futures, with upside potential being limited by strength in the U.S. dollar index.
  • Lackluster demand is limiting buying in corn futures. Gulf corn basis is flat this morning.
  • Traders will be hesitant to extend positions too far ahead of Friday's USDA reports. Traders look for USDA to raise the size of the corn crop slightly from last month and to lower its export projection.

 

Soybean futures are mostly 6 to 8 cents lower on improved weather in Brazil, with far- deferred contracts steady to firmer.

  • Most soybean contracts are being pressured by improved weather over northern Brazil over the weekend, as the parched area is in need of showers. Forecasters say more rain is on the way to the area this week to encourage soybean planting.
  • Additional pressure is coming from strength in the U.S. dollar index.
  • Traders will also be focused on evening positions ahead of Friday's key USDA reports, which are expected to reflect "better-than-expected" yields.

 

Wheat futures are mostly 2 to 5 cents higher amid crop concerns.

  • Wheat is being supported by crop concerns, as traders look for this afternoon's crop condition ratings from USDA to reflect stress on the HRW wheat crop due to a lack of much-needed rain last week.
  • Australia's largest exporter, CBH, lowered its estimate of the Western Australia crop to a range of 8.5 MMT to 9.3 MMT. They previously pegged the crop between 9.1 MMT to 9.3 MMT.
  • Strength in the dollar is limiting buying as traders recognize U.S. wheat is not competitively priced on the global market.

 

Live cattle futures are called to open mixed amid spreading, with buying limited by negative outside markets.

  • Traders will be watching the boxed beef market closely this week for cash clues, as well as signs of bottoming after Choice values slid sharply last week.
  • Last week's cash cattle trade was steady to $1 lower at $126 to $127. Cash sources will be getting a showlist count early this week, with initial thoughts that supplies are tighter than last week.
  • Negative outside markets will limit buying in cattle futures to short-covering.

 

Lean hog futures are called mixed, with pressure on nearby contracts expected to be limited by the discount they hold to the cash index.

  • Strength in the dollar will limit buying in lean hog futures, although the $5 discount December lean hog futures hold to the cash index will limit selling in nearby contracts.
  • Traders are keeping a close eye on the pork cutout market for cash clues this week, especially after pork movement surged last week.
  • The cash hog market is called steady to lower as packers have plenty of supplies to choose from and are bought ahead on slaughter needs.
     
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