Market Snapshot, 8:30 am CT (VIP) -- October 17, 2012

October 17, 2012 03:44 AM
 

Corn futures are mostly 1 to 3 cents higher on dollar weakness.

  • Corn futures have returned to the upper end of Tuesday's trading range after posting a disappointing close yesterday amid price consolidation.
  • Much of this morning's price support comes on help from dollar weakness, which is spurring more of a "risk-on" trading atmosphere.
  • Gulf basis is 1 cent stronger this morning for immediate delivery, which reflects the overall tightness of supplies.
  • Yet, export demand is lackluster and end-users are seeking cheaper-priced alternatives.

 

Soybean futures are 3 to 9 cents higher, with deferred months leading gains.

  • Soybean futures saw choppy trade overnight, but have firmed on help from weakness in the U.S. dollar index due to some positive signs in the euro-zone.
  • Additional support comes from ideas prices are a value given reports that reflect continued strong demand for U.S. supplies.
  • Yet expectations that Brazilian soybean production will outpace the U.S. this year are also on traders' minds. Still, global supplies will remain tight until the South American crop is harvested early next year.

 

Wheat futures are mostly 3 to 5 cents higher, with Minneapolis leading gains amid strong demand for high-protein wheat.

  • Wheat is enjoying spillover from neighboring pits as well as weakness in the U.S. dollar index, which helps the U.S. gain a competitive edge in the global market.
  • Yet, demand for U.S. wheat has not been stellar, although traders anticipate demand news is on the horizon due to tightening supplies in the Black Sea region.
  • Recent rains are beneficial for the winter wheat crop in the U.S. Southern Plains and more precip is in the forecast. Recent rains in areas of the FSU and Europe have also provided winter wheat crops a boost.

 

Live cattle futures are called to open higher on followthrough from yesterday's gains and strength in the boxed beef market.

  • Choice boxed beef values have risen above $195-per-cwt., which is a level that has slowed demand in the past. However, 173 loads changed hands yesterday.
  • Strength in the product market and tighter market-ready supplies give feedlots the upper hand, with traders anticipating higher cash cattle trade with last week's $125 trade.
  • October live cattle are trading in line with last week's cash trade, which opens fresh upside potential for nearby contracts if bullish cash hopes build.
  • Slight strength in the corn market this morning is expected to weigh on feeder cattle futures.

 

Lean hog futures are called to open mixed amid spreading and steady cash.

  • The cash hog market is expected to be mostly steady today as packers are having no difficulty securing needed supplies despite plans for a large Saturday kill.
  • Meanwhile, the pork product market is holding strong despite increasing production. The cutout value slipped just 7 cents yesterday on strong movement of 103.75 loads.
  • But traders suspect the pork market is nearing a seasonal shift, especially given rising supplies. As a result, they are hesitant to extend long positions.
     
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