Market Snapshot, 8:30 am CT (VIP) -- September 12, 2012

September 12, 2012 03:43 AM

Corn futures are 5 to 12 cents lower in reaction to bearish USDA data.

  • Traders are reacting to a smaller-than-expected drop in the size of the corn crop, as USDA's estimate of 10.727 billion bu. came in above traders' expectations and down just 52 million bu. from last month.
  • USDA raised 2011-12 carryover more than expected to 1.181 billion bu. and raised 2012-13 carryover by 83 million bu. to 733 million bu. (traders expected a 32-million-bu. reduction in new-crop carryover).
  • USDA raised its global 2012-13 corn carryover projection by 620,000 metric tons (MT) to 123.95 million metric tons (MMT); still down from 139.6 MMT in 2011-12.


Soybean futures are trading mid-range with gains of 9 to 16 cents in most contracts.

  • USDA report data failed to provide a bullish surprise, but soybeans are being supported by a slightly bigger-than-expected reduction in the size of the crop to 2.634 billion bushels.
  • USDA trimmed 2011-12 soybean carryover to 130 million bu. and left 2012-13 carryover unchanged at 115 million bu. -- still reflecting a very tight supply situation.
  • USDA trimmed its 2012-13 global soybean carryover projection by 280,000 MT from last month to 53.10 MMT; down from 53.65 MMT in 2011-12.


Chicago and Kansas City wheat are trading mostly 5 to 8 cents lower, with Minneapolis wheat mostly 2 to 3 cents lower.

  • Wheat is seeing spillover from the corn market, as this morning's USDA report data didn't provide any big surprises for wheat traders.
  • USDA left 2012-13 U.S. carryover unchanged at 698 million bushels.
  • USDA's global 2012-13 carryover projection of 176.71 MMT is slightly positive, as it's down 460,000 MT from last month and 21.93 MMT lower than 2011-12.


Live cattle futures are called higher on strong beef movement and tightening supplies.

  • A combination of tightening market-ready supplies and strong boxed beef movement is expected to support live cattle futures this morning as it signals steady to higher cash cattle trade is likely later in the week.
  • USDA raised its 2012 and 2013 beef production forecasts slightly from last month and slightly raised its 2012 average cash steer price projection to a range of $120 to $122 per cwt; the 2013 price projection was left at $122 to $132 per cwt.


Lean hog futures are called higher based on improvement in the pork market.

  • Traders are encouraged by yesterday's 96-cent gain in the pork cutout value on strong movement of 172.5 loads, as it signals the market may be working on a near-term low.
  • As a result, the market is expecting mostly steady cash hog bids, although many locations have needs secured and could still lower bids.
  • USDA lowered its 2012 and 2013 pork production forecasts slightly from last month, but trimmed its 2012 average cash hog price projection by $2 on both ends to $60 to $61 per cwt.; 2013 price projection was left at $62 to $67 per cwt.
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