Market Snapshot, 8:30 am CT (VIP) -- October 12, 2012

October 12, 2012 03:43 AM
 

Corn futures are 5 to 7 cents lower on profit-taking and a disappointing export sales tally.

  • Following yesterday's strong gains, corn futures softened overnight amid profit-taking.
  • Futures have slightly extended losses on a disappointing weekly export sales tally of 4,200 MT for 2012-13 and 10,000 MT for 2013-14. This came in well below expectations and reflects demand destruction.
  • But traders still have yesterday's tighter-than-expected carryover projection on their minds, which is limiting pressure to profit-taking.

 

Soybean futures are mostly 11 to 14 cents lower amid light profit-taking following yesterday's strong gains.

  • Futures were weaker overnight amid profit-taking, which wasn't a big surprise given the fact futures came off session highs in late trade yesterday.
  • Weekly soybean sales of 500,700 MT for 2012-13 and 23,000 MT for 2013-14 came in below expectations and are adding to the negative tone this morning.
  • The fact remains that cumulative bookings are running 37% ahead of year-ago when USDA projects exports to be 7% below year-ago levels.

 

Wheat futures are 4 to 9 cents lower at all three exchanges amid profit-taking and a lack of fresh news.

  • Wheat is seeing spillover from neighboring pits and profit-taking, with pressure limited by weakness in the U.S. dollar index.
  • Weekly export sales of 279,900 MT came in below expectations. Cumulative bookings are running 12% behind year-ago and USDA projects exports to be 9.5% ahead of year-ago.
  • Russian Deputy Ag Minister Ilya Shestakov put the country's grain forecast at 71.7 MMT. Earlier this week, the Ag Minister Nikolai Fyodorov said grain production would be 70 MMT.

 

Live cattle futures are called mixed as traders wait on cash trade to begin.

  • Pressure on live cattle futures should be limited by strength in the boxed beef market and tighter market-ready supplies, which spurred early cash cattle trade at $125 in Kansas yesterday -- $1 above last week.
  • But without active cash cattle trade, buying in live cattle futures is expected to be limited as traders are also working to even positions ahead of the weekend.
  • Feeder cattle are expected to benefit from short-covering following yesterday's sharp to limit losses, as well as weakness in the corn market this morning.

 

Lean hog futures are called mixed as traders even positions ahead of the weekend.

  • Lean hog futures are expected to be choppy as traders even positions ahead of the weekend. But upside potential will be limited to short-covering as traders anticipate seasonally expanding supplies are limiting cash improvement.
  • The cash hog market is expected to be mostly steady today as packers have had no difficulty securing needed supplies and are focused on improving profit margins.
  • Still, pork cutout values rose $1.04 yesterday on strong movement of 85.5 loads, suggesting strong demand continues.
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