Market Snapshot, 8:30 am CT (VIP) -- October 26, 2012

October 26, 2012 03:44 AM
 

Corn futures are fractionally to a penny firmer amid short-covering.

  • Corn futures are enjoying light short-covering this morning, but gains are being limited by mixed outside markets. The U.S. stock market is holding near unchanged as investors weigh the latest corporate earnings against stronger-than-expected 3rd qtr. GDP.
  • A lack of fresh news is limiting buying interest in corn futures, which reflects price rationing as demand has slowed in the midst of historically high prices.
  • So far corn hasn't strayed far from unchanged, but is trading near session highs. For the week, corn is poised to end lower.

 

Soybean futures are mixed, with nearby contracts 1 to 2 cents lower amid slight strength in the U.S. dollar index.

  • The dollar index is firming and gold is stronger, but crude oil has been choppy so far this morning. Soybeans are mixed amid bull spread unwinding.
  • Buying in soybean futures is being limited by forecasts for much-needed rains in dry areas of Brazil this weekend.
  • But continued strong demand, as export sales are running ahead of the needed pace to reach USDA's export forecast, is limiting selling.
  • Soybeans are working on gains for the week, but need followthrough buying to post a high-range close that would signal a near-term low has been posted.

 

Wheat futures are mixed at all three exchanges, but most contracts are 1 to 3 cents firmer.

  • Wheat is being pulled between weakness in the soybean market and light short-covering from the corn market. Buying is limited by a lack of fresh news.
  • The lack of rain in the forecast for the Central and Southern U.S. Plains is supportive for nearby futures, as are dry conditions in areas of Australia and the Black Sea region.
  • Slight strength in the U.S. dollar index is limiting buying to short-covering.

 

Live cattle futures are called mixed amid pre-weekend position squaring.

  • Cattle traders are disappointed by this week's steady to 50 cent lower cash cattle trade that occurred between $126.50 and $127.
  • But ideas yesterday's losses were overdone could spur some short-covering, as traders recognize market-ready supplies are tight.
  • Traders are watching for resistance to higher boxed beef prices. While Choice cuts dropped just 1 cent, Select was down $1.37 on moderate movement of 151 loads.
  • Feeder cattle are expected to be choppy as well, although buying will be limited by slight strength in the corn pit.

 

Lean hog futures are called mixed on short-covering vs. ideas a near-term high has been posted.

  • Lean hog futures are working on weekly losses, but so far haven't don't any serious chart damage. Futures are called mixed amid pre-weekend position squaring.
  • Upside potential will be limited by concerns about the cash hog market, as demand for hogs has softened and supplies are plentiful.
  • The pork cutout value improved 25 cents yesterday, but is down for the week. Packer margins returned to the black yesterday, but still aren't strong enough to improve demand for cash hogs.
     
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