Market Snapshot, 8:30 am CT (VIP) -- October 24, 2012

October 24, 2012 03:54 AM
 

Corn futures are 2 to 4 cents higher on spillover support.

  • Nearby corn futures are seeing light spillover from the soybean market, although a lack of fresh news is limiting buying interest.
  • Planting delays due to heavy rains in Argentina threaten to move more acres to soybeans, although focus is split, with some attention on the fact current prices are rationing demand.
  • Mild weakness in the U.S. dollar index is also supportive for corn futures.

 

Soybean futures are 5 to 8 cents higher on strong demand.

  • Soybean are higher as traders recognize prices are not slowing demand. This morning, USDA announced a 105,000-MT soybean sale to unknown destinations for 2012-13.
  • China's General Administration of Customs confirmed what we reported on Oct. 15, the country's soy imports in September of 4.97 MMT were up 20.3% from a year earlier and for the first nine months of the year imports of 44.3 MMT were up 17.7%.
  • The U.S. dollar index is weaker this morning on news China's manufacturing sector is showing signs of stabilizing. The country's flash PMI rose in October.

 

Wheat futures are mostly 9 to 12 cents higher in Chicago, with Kansas City and Minneapolis futures posting lesser gains.

  • Chicago wheat futures are leading gains amid hopes export demand will improve as Ukraine's ag ministry confirmed it will halt exports as of Nov. 15.
  • Weakness in the U.S. dollar index is positive for wheat this morning, although buying is not being seen across the commodity sector.
  • Ongoing concerns about dryness in Australia and the need for more rains in the U.S. Southern Plains is keeping crop concerns on traders' minds, but wheat needs fresh demand news to keep bulls interested.

 

Live cattle futures are called steady to firmer on strength in the boxed beef market.

  • Boxed beef prices were stronger again yesterday, with Choice values now within $1.48 of the $200-per-cwt. level.
  • However, packers' profit margins are still in the red, which will limit their willingness to raise cash cattle bids. Feedlots want higher prices and say they can wait since feedlot numbers are tightening.
  • The U.S. dollar index is weaker this morning and the U.S. stock market is posting a slight recovery following yesterday's sharp decline. Less-negative outside markets are expected to encourage some short-covering in cattle futures.

 

Lean hog futures are called mixed, with nearby contracts pressured by weakness in the pork product market.

  • The pork cutout value slipped $1.23 yesterday, and while movement improved to 114 loads, packers saw profit margins tighten.
  • As a result, the cash hog market is called steady to lower as packers say this week's needs have largely been secured. This is expected to pressure nearby futures.
  • Weakness in the pork market combined with a bearish Cold Storage Report could be what puts in a short-term top in futures.
     
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