Market Snapshot, 8:30 am CT (VIP) -- October 19, 2012

October 19, 2012 03:33 AM
 

Corn futures have softened to mixed trade, with nearbys holding onto marginal gains.

  • Price action has turned choppy in the corn pit ahead of open-outcry trade as focus is on evening positions ahead of the weekend.
  • Slight strength in the U.S. dollar index is also limiting buying in corn futures.
  • Also, news that Japan's corn-for-feed use declined further in August reminds the market end-users are seeking alternative feed sources.
  • But Gulf corn basis is firmer for immediate delivery this morning, which reflects a possible increase in demand but also tight supplies.

 

Soybean futures have slipped to narrowly mixed trade as focus has turned to evening positions.

  • Futures spent the overnight session pivoting around yesterday's high, which still is above last week's high. Today's close could be telling of near-term direction.
  • But expectations for a big South American crop are limiting buying, although these supplies won't be available until early next year.
  • Gulf soybean basis is weaker for immediate delivery, which suggests a slowdown in demand but also the availability of new-crop supplies.

 

Wheat futures are 3 to 8 cents higher at all three exchanges on word Ukraine will limit exports.

  • Wheat futures have been the upside leader this morning on news Ukraine will reportedly ban wheat exports starting Nov. 15, although this has not yet been confirmed by the country's ag ministry.
  • Also this morning, USDA announced export sales of 230,000 MT of wheat to unknown destinations for 2012-13. Of the total, 117,600 MT is hard red winter, 49,400 MT is hard red spring, 58,200 MT is soft white wheat and 4,800 MT durum wheat.
  • This follows yesterday's weekly export sales data that was up sharply from the previous week, indicating improved demand for U.S. wheat.

 

Live cattle futures are called higher ahead of this afternoon's Cattle on Feed Report.

  • Live cattle futures are expected to see a boost ahead of this afternoon's Cattle on Feed Report, which is expected to show On Feed at 97.8%, Placements at 85% and Marketings at 89.8% of year-ago levels.
  • Cash cattle trade will likely be delayed until this afternoon, but expectations are for $1 to $2 higher trade due to ongoing strength in the beef market
  • Choppy price action in the corn market should provide support to feeder futures, as should expectations for a sharp reduction in Placements.

 

Lean hog futures are called to open mixed amid spreading, although support will be limited by weakness in the pork market.

  • Pork cutout values slipped 92 cents yesterday, which tightens packers' profit margins and adds to ideas a seasonal decline in values is in the works.
  • But the cash hog market is still expected to be mostly steady this morning as packers are working to secure supplies for next week and a few locations still need additional supplies for tomorrow's kill.
  • Buying interest in futures could also be limited by expectations Monday's Cold Storage Report will reflect record-large frozen pork stocks for the end of September.
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