Market Snapshot, 8:30 am CT (VIP) -- November 6, 2012

November 6, 2012 02:45 AM

Corn futures are 2 to 4 cents higher amid short-covering and help from outside markets.

  • Weakness in the U.S. dollar index on election day spurred short-covering for grain futures overnight. Key will be if this trend continues at the start of open-outcry trade given the lack of fresh news.
  • Traders are also focused on evening positions ahead of Friday's Crop Production Report. A survey of 21 firms done by Dow Jones Newswires reflects expectations for a slight drop in the size of the corn crop from last month, although the average trade guess for corn yield of 122.1 bu. per acre is up from 122 bu. per acre in October.
  • Gulf corn basis is flat this morning to reflect a lack of fresh demand news.


Soybean futures are 8 to 14 cents higher amid short-covering.

  • Following yesterday's losses, soybean futures needed a dose of short-covering to avoid doing any technical damage. January beans respected the $15.00 level yesterday and again in overnight trade.
  • Buying is being limited by forecasts for better rain chances in northern production areas of Brazil this week.
  • A Dow Jones Newswires survey reflects traders, on average, expect USDA to raise the size of the soybean crop by 30 million bu. from last month, with yield expected at 38.2 bu. per acre (37.8 bu. per acre in October).
  • Gulf soybean basis is flat, which reflects a "balanced" supply and demand situation.


Wheat futures are mostly 4 to 7 cents higher at all three exchanges on concerns about the HRW wheat crop.

  • Wheat is getting a lift from concerns about the HRW wheat crop. Yesterday's USDA Crop Condition Report reflected continued deterioration in the winter wheat crop. State weather and crop reports reflect the need for rains in the HRW wheat belt to stabilize the crop. But the forecast for the next two weeks is dry.
  • Strength in the soybean and corn markets, along with a weaker U.S. dollar is also supportive for wheat futures this morning.
  • Traders look for USDA to raise 2012-13 wheat carryover by around 12 million bu. from last month to 666 million bu. in Friday morning's Supply & Demand Report.


Live cattle futures are called to open mixed as traders wait on cash cattle clues.

  • Live cattle futures are called mixed as traders wait on clearer direction from the cash market. Some short-covering could also be seen due to positive outside markets.
  • Choice boxed beef values values rose 28 cents yesterday and Select declined 25 cents. Movement at 172 loads was very solid for a Monday.
  • This week's showlist is up from last week and Nebraska feedlots are not current. Given negative cutting margins, packers will be hesitant to raise cash bids.
  • Feeder cattle futures are called lower due to strength in the corn market.


Lean hog futures are called mixed amid spreading.

  • December lean hog futures hold around a $6 discount to the cash index, which could limit followthrough pressure from yesterday's losses.
  • Futures are called mixed amid spreading, but followthrough from yesterday's losses would strongly suggest a near-term high has been posted.
  • Nearby futures should also find support from yesterday's 93-cent improvement in the pork cutout market.
  • The cash hog market is expected to be mostly steady today, but some lower bids are still possible as supplies are plentiful.
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