Market Snapshot, 8:30 am CT (VIP) -- October 1, 2012

October 1, 2012 03:41 AM
 

Corn futures are 2 to 5 cents higher on light followthrough from Friday's sharp to limit-higher gains.

  • Corn futures posted double-digit gains earlier, but have moved off session highs. Key will be if funds return as buyers at the start of open-outcry trade to build on Friday's bullish reversal. Today's trading limit is expanded to 60 cents.
  • Traders still have Friday's bullish grain stocks surprise on their minds, as USDA reported Sept. 1 stocks (2011-12 carryover) below the key 1-billion-bu. mark.
  • USDA announced Mexico purchased 100,000 metric tons (MT) of U.S. corn, with 33,333 MT for 2012-13 and 66,667 MT for 2013-14.
  • Outside markets are also positive this morning. Weakness in the U.S. dollar index is supportive for general commodity buying.

 

Soybean futures are 10 to 14 cents lower amid a lack of fresh news.

  • Soybean futures are seeing profit-taking pressure following Friday's strong gains. Additional pressure comes from stepped-up harvest-related hedge pressure. Open harvest weather signals active harvest progress is likely this week.
  • Fresh demand news is expected to be lacking this week as China celebrates a week-long national holiday.
  • Chinese economic data was again downbeat, with its key manufacturing index posting the eleventh straight month of contraction.

 

Wheat futures are 5 to 10 cents lower this morning on spillover from soybeans and rains in the Plains.

  • Recent rains across the Plains have improved soil moisture enough to encourage active winter wheat planting.
  • The Institute for Agricultural Market Studies (IKAR) raised its Russian wheat crop estimate by 1 million metric tons (MMT) to 40 MMT and says the country exported 7.9 MMT of grain since July 1. It sees sees October grain exports slipping to 2.5 MMT from 3 MMT in September.
  • Wheat futures continue within the bounds of the long-lasting consolidation range. December Chicago wheat is pivoting around $9.00 this morning.

 

Live cattle are called to open steady to lower on weakness in the boxed beef market.

  • Live cattle futures are vulnerable to more near-term pressure as the boxed beef market has not yet signaled it has posted a short-term low. Choice values declined $3.06 on Friday, with Select down $2.66.
  • Expectations are packer demand could be limited this week as retailers are switching from higher-quality grilling cuts to less expensive cuts.
  • Positive outside markets should limit pressure on live cattle futures, however, as the U.S. dollar index is weaker and the U.S. stock market is stronger this morning.

 

Lean hog futures are called narrowly mixed as traders reevaluate positions.

  • Friday's Quarterly Hogs & Pigs Report was deemed neutral by traders, as most categories were close to pre-report expectations.
  • But the report is slightly positive for deferred contracts as it shows producers plan to reduce fall/winter farrowings compared to year-ago levels.
  • With the report out of the way, traders are returning their focus to the cash market, which is expected to be mostly steady as packers anticipate plentiful supplies to draw from.
     
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