Market Snapshot, 8:30 am CT (VIP) -- October 2, 2012

October 2, 2012 03:39 AM
 

Corn futures are 7 to 9 cents lower through the September contract on heavy spillover from soybeans.

  • Corn futures are seeing spillover from sharp weakness in the soybean market, which signals traders have Friday's bullish corn stocks figure factored into prices.
  • The bulk of harvest-related hedge pressure should be behind the market, as harvest has crossed the halfway point at 54% complete as of Sunday. But so far basis improvement has been limited.
  • Weakness in the U.S. dollar index should help limit pressure on corn. December corn has slipped below the psychological $7.50 level.

 

Soybean futures are mostly 23 to 27 cents lower amid harvest pressure and technical-based selling.

  • Soybean futures have extended their slide amid technical selling, as sell stops were triggered on the move below important support levels. November beans have violated support at the July 25 low of $15.36.
  • Yesterday's progress report showed harvest was 41% complete as of Sunday, signaling the likelihood for more hedge-related pressure.
  • While the U.S. dollar index is weaker this morning, traders don't anticipate any fresh demand news after China bought beans last week ahead of this week's national holiday.

 

Wheat futures are mostly 11 to 16 cents lower at all three exchanges on spillover from soybeans and a lack of fresh positive news.

  • Wheat is being pressured by spillover from neighboring markets, as well as recent weather improvements in the U.S. Central and Southern Plains and areas of Australia.
  • Russia hopes to sell 500,000 metric tons (MT) of government intervention wheat stocks by year-end in Siberia, the Urals and the Far Eastern Region. This is getting mixed reviews, but overall Russia's stocks are seen as tightening.
  • December Chicago wheat remains within the boundaries of the long-lasting consolidation phase, but have moved into the lower quarter of the range.

 

Live cattle futures are called to steady to slightly lower on cash market uncertainty.

  • Choice boxed beef values improved 21 cents yesterday, but Select declined $1.23. Movement was decent at 191 loads, but given this week's slightly larger showlist, improvement in the product market is needed to encourage packers to raise cash bids.
  • Packers offered $121 for cash cattle yesterday, but feedlots are holding out for steady bids with last week's $123 trade.
  • Feeder cattle futures are expected to see a lift from weakness in the corn market.

 

Lean hog futures are called steady to slightly higher on strength in the pork market.

  • The pork cutout value improved 41 cents yesterday, but cash improvement will be limited unless the pork market continues to improve as margins have tightened.
  • The cash hog market is called steady to $1 higher, which signals a slight tightening of market-ready supplies.
  • A bigger-than-expected increase in the heavyweight hog marketing category in Friday's Hogs & Pigs Reports, however, signals near-term slaughter supplies are plentiful.
     
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