Market Snapshot, 8:30 am CT (VIP) -- September 13, 2012

September 13, 2012 03:45 AM
 

Outside markets are in a holding pattern as investors wait on the Federal Open Market Committee's policy statement at 11:30 a.m. CT. Hopes are high the Fed will announce another round of quantitative easing, dubbed "QE3." The U.S. dollar index has plunged recently on expectations for such a move, which is supportive for commodity markets.

 

Corn futures are favoring a slight upside bias in choppy trade.

  • Following yesterday's losses, corn futures are mostly 2 to 3 cents higher amid light short-covering thanks to slight dollar weakness.
  • But yesterday's USDA Crop Production Report didn't show the cuts to the crop traders expected, which is limiting buying again this morning.
  • This morning's weekly export sales data showed corn sales of 214,800 metric tons (MT) for 2012-13 and 212,500 MT for 2013-14, which was within expectations. A total of 1,667,200 MT in undelivered sales for 2011-12 were carried over to 2012-13.
  • Also on traders' minds is news the China National Grain and Oils Information Center forecasts Chinese corn imports at around 1 million metric tons (MMT) in 2013, which would be down sharply from 5.5 MMT forecast for this year.

 

Soybean futures are steady to 4 cents lower in most contracts on light profit-taking following yesterday's sharp gains.

  • Traders are reevaluating positions following yesterday's sharp gains inspired by a reminder of the tight stocks situation via USDA's Supply & Demand Report. Traders are also cautious as they await the Fed's decision on further economic stimulus.
  • Weekly export soybean sales of 628,200 MT for 2012-13 were within expectations, with China the lead buyer. A total of 2,016,800 MT in undelivered sales for 2011-12 were carried over to 2012-13.
  • Weekly soymeal and soyoil sales were also within expectations.

 

Nearby wheat futures at all three exchanges are slightly higher, with far-deferred contracts mixed.

  • Nearby wheat futures are being supported by dollar weakness and tightening global stocks, as traders still have yesterday's USDA S&D Report on their minds.
  • But limiting early gains is this morning's weekly wheat export sales data showing sales of 381,800 MT for 2012-13, which was below expectations.
  • News Strategies Grains has cuts its estimate of the EU wheat crop to 53.7 MMT due to hot and dry conditions is also supportive this morning.
  • Expansion of drought across the Plains -- as reflected by the national drought monitor -- is also supportive for wheat futures this morning as it raises concerns about establishment of the winter wheat crop.

 

Live cattle futures are called higher on higher cash cattle trade in the Plains.

  • Cash cattle trade got underway at $126 to $127 in the Plains late Wednesday. Those prices were $2 to $3 above last week's trade and are supportive for futures.
  • Boxed beef prices were slightly higher yesterday on strong movement of 236 loads.
  • Live cattle futures are also expected to find technical-based buying after an upside breakout from the extended, choppy range on the daily charts.

 

Lean hog futures are called to open lower amid weakness in the pork cutout market.

  • Traders were hopeful the pork market was working on a near-term low, but yesterday's $1.70 plunge in the pork cutout value has renewed concerns the market has not yet found a floor of support.
  • Given expectations for record weekly pork production through the end of September, traders have no reason to do more than cover short positions.
  • Nearby lean hogs are trading at a slight premium to the cash index and the cash market is expected to be mostly 50 cents to $1 lower this morning in reaction to plentiful supplies.
     
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