Market Snapshot, 8:30 am CT (VIP) -- October 25, 2012

October 25, 2012 03:43 AM
 

Corn futures are mostly marginally to 1 cent lower in lackluster trade.

  • Positive outside markets are helping to limit pressure on corn futures, although a lack of fresh news is also limiting buying.
  • Traders expected this morning's weekly export sales data to reflect the slowdown in demand and sales of 142,300 MT came in below expectations.
  • The International Grain Council (IGC) trimmed its estimate of global 2012-13 corn carryover by 1 MMT to 117 MMT, which compares to 135 MMT last season. This reduction is due to a 2 MMT decline in world production offsetting a reduction in demand.

 

Soybean futures are mixed, with nearbys down 3 to 4 cents on disappointing weekly export sales data.

  • This morning's weekly export sales data showed sales of 522,200 MT for 2012-13, which came in below expectations. However, total commitments (sales plus shipments) are running 37% ahead of year-ago, which is well ahead of the pace needed to reach USDA's export projection.
  • Also this morning, USDA announced a 120,000 MT soybean sale to unknown destinations for 2012-13 -- which signals there has been no slowdown in demand.
  • IGC has raised its estimate of 2012-13 global soybean carryover by 5 MMT to 27 MMT, which compares to 24 MMT last season.

 

Wheat futures have firmed on stronger-than-expected weekly export sales data.

  • This morning's weekly export sales report showed sales of 572,000 MT, which came in above expectations. Traders are cautiously optimistic the recent pickup in demand will continue given tightening supplies in the Black Sea region.
  • The National Drought Monitor showed no change in drought conditions in Kansas, with the western half of the state covered in "extreme" to "exceptional" drought -- raising concerns about winter wheat establishment.
  • IGC has trimmed its estimate of global 2012-13 wheat carryover by 3 MMT to 172 MMT due to further declines in the global crop. This compares to 196 MMT last season.

 

Live cattle are called higher based on strength in the boxed beef market.

  • The rise to an all-time high in Choice boxed beef values is expected to propel live cattle futures higher this morning. Choice beef values rose another 86 cents yesterday to $199.38. Impressively, movement was strong at 189 loads.
  • Traders are cautious, though, as they worry beef prices will soon be met with resistance.
  • Traders are still waiting on cash cattle trade to begin. Packers are reluctant to raise bids, but expectations are for $1 to $2 higher trade compared to last week's $127 trade.
  • This morning's weekly export sales report showed beef sales up slightly from last week at 16,800 MT despite rising prices.

 

Lean hog futures are called mixed amid spreading, with nearbys pressured by the drop in pork cutout values.

  • Nearby lean hog futures are expected to be weaker after pork cutout values slipped $1.99 yesterday.
  • The drop in pork values pushed packers' profit margins into the red. As a result, the cash hog market is expected to be steady to softer today.
  • Weakness in the pork market is raising expectations a near-term high has been posted in lean hog futures, although no serious technical chart damage has been done.
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