Market Snapshot, 8:30 am CT (VIP) -- October 10, 2012

October 10, 2012 03:42 AM
 

Corn futures are mostly around a penny lower in lackluster trade as traders even positions ahead of tomorrow morning's USDA reports.

  • Corn futures have seen very little net change in price this week, as traders are focused on evening positions ahead of tomorrow morning's USDA October reports. Traders look for USDA to lower the size of the corn crop and tighten carryover.
  • Gulf corn basis is 1 to 4 cents higher for nearby delivery amid supplies.
  • But news of record Australian wheat exports in 2011-12 as the end of August reminds traders end-users are seeking alternative to U.S. corn.

 

Soybean futures have improved to mixed trade, but the November through March contracts are 2 to 6 cents lower.

  • Buying in the bean pit has been limited this week as traders expect tomorrow's USDA data to reflect "better-than-expected" yields and a small increase in carryover.
  • But this morning's announcement of a 120,000 MT soybean sale to China for 2012-13 reminds traders prices are not rationing demand.
  • Gulf soybean basis is 1 to 4 cents higher for nearby shipment, reflecting strong demand.

 

Wheat futures at all three exchanges are 2 to 5 cents higher on support from tightening global supplies.

  • There is speculation today's government-led meeting in Russia regarding this year's crops could end with an announcement on export restrictions. Regardless of an announcement, Russia's exportable supplies are quickly diminishing.
  • Futures are also being supported by concerns about dryness in Western Australia, as well as warm and dry conditions in the FSU and the need for more rains across the U.S. Plains.
  • Traders are also focused on evening positions ahead of tomorrow morning's USDA reports, in which the 2012-13 carryover projection is expected to be lowered.

 

Live cattle futures are called to open slightly higher as traders are cautiously optimistic about firmer cash prospects.

  • Strength in the boxed beef market and tighter market-ready supplies this week raises expectations for higher cash cattle prices compared with $124 trade last week.
  • Choice boxed beef values rose 63 cents and Select was up 87 cents yesterday on improved movement of 237 loads.
  • But mild weakness in the U.S. stock market due to concerns about global economic growth are expected to limit buying in cattle futures.
  • Feeder cattle futures are expected to be choppy given lackluster trade in the corn pit.

 

Lean hog futures are called to open higher on strength in the pork market.

  • The pork cutout value rose $1.40 yesterday on improved movement of 126.5 loads. This helped to lift packers' profit margins.
  • But the cash hog market is expected to be mostly steady today as seasonally increasing supplies make it easy for packers to secure this week's needs.
  • While October lean hog futures are trading at around a dollar premium to the cash index, December hogs will soon be the lead-month contract and are trading at more than a $4 discount to the index.
     
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