Market Snapshot, 8:30 am CT (VIP) -- November 7, 2012

November 7, 2012 02:59 AM
 

Corn futures are 1 to 2 cents lower due to negative outside markets.

  • After choppy trade overnight, corn futures have softened amid spillover pressure from soybeans and outside markets.
  • So far this week traders haven't been willing to move corn futures too far in either direction as they wait on Friday's USDA reports. Traders look for USDA to lower the size of the corn crop slightly, with carryover also seen rising slightly as USDA is expected to trim its export projection.
  • Gulf corn basis remains flat amid a lack of fresh export news.

 

Soybean futures are mostly 6 to 10 cents lower to continue this week's back and forth price action.

  • Strength in the U.S. dollar index is weighing on the commodity markets, which is spilling over into the soy complex this morning.
  • Improved rainfall chances in northern production areas of Brazil this week are also weighing on soybean futures this morning.
  • But futures are likely to remain range-bound ahead of Friday's USDA reports. Traders look for USDA to raise the size of the soybean crop slightly from last month and for 2012-13 carryover to climb by 3 million bu. to a still-tight 133 million bushels.

 

Wheat futures are mostly 2 to 3 cents higher on global crop concerns.

  • Wheat futures are seeing support from concerns about the U.S. and Australia wheat crops. The Australian Bureau of Meteorology says neutral ENSO conditions are expected to linger, which raises concerns about dryness in the U.S. Plains and Australia.
  • But price action is likely to remain range-bound and choppy ahead of Friday's USDA reports Friday morning. Traders look for USDA to raise U.S. wheat carryover by around 12 million bu. from last month to 666 million bushels.
  • Strength in the U.S. dollar and weakness in neighboring markets is limiting buying in wheat this morning.

 

Live cattle futures are called to open lower based on weakness in outside markets.

  • Live cattle futures are expected to be weaker this morning due to negative outside markets. Strength in the U.S. dollar index and losses in the U.S. stock market have raised concerns about meat demand.
  • Slight strength in the boxed beef market this week hasn't raised expectations for cash cattle trade as showlists are up and packers are dealing with highly negative profit margins.
  • Choice boxed beef values improved 63 cents and Select rose $1.16 yesterday on solid movement of 169 loads. Traders will be watching this morning's update to see if this trend continues.

 

Lean hog futures are called lower based on demand concerns and negative outside markets.

  • Futures are expected to be pressured by concerns about the pork product market. The pork cutuout value slipped $1.19 yesterday to dramatically trim packers' profit margins.
  • As a result, the cash hog market is called steady to lower as packers have plenty of supplies to draw from and will work to keep margins in the black.
  • But pressure on nearby futures could be limited by the discount December lean hog futures hold to the cash index.
     
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