Market Snapshot, 8:30 am CT (VIP) -- September 19, 2012

September 19, 2012 03:41 AM
 

Corn futures are 3 to 7 cents higher on short-covering, with nearbys leading gains.

  • Corn futures were lifted by short-covering and spillover from soybean futures overnight. A lack of fresh fundamental news is limiting buying so far this morning.
  • News the Bank of Japan will increase its purchases of bonds to stimulate its economy is also supportive for commodity markets this morning. But so far, the U.S. dollar index has been choppy.
  • Gulf corn basis has firmed for immediate delivery to reflect a tight supply situation.

 

Soybean futures are 18 to 20-plus cents higher on short-covering, with nearbys leading gains. Meal and soyoil are seeing spillover support.

  • Soybean futures are the upside leader this morning on ideas recent losses have been overdone. Key will be if early gains are sustained or built upon, as that would signal the downside correction has run its course.
  • Upside potential is being limited by better-than-expected early yield results.
  • Gulf soybean basis is unchanged this morning, suggesting no fresh demand news has surfaced.

 

Nearby wheat futures at all three exchanges are mostly around 10 to 13 cents higher, with deferred contracts posting lighter gains.

  • Wheat is seeing spillover from neighboring pits, as well as news of Japan's bond buying program, which traders believe will help keep the country buying wheat.
  • Russia's ag minister has narrowed its grain production forecast to 72 million metric tons (MMT) to 73 MMT. Its export forecast remains unchanged at 10 MMT to 14 MMT.
  • Lingering dryness in Australia and the U.S. Southern Plains keeps the tightening global crop situation on traders' minds.

 

Live cattle futures are called steady to higher on strength in the boxed beef market.

  • Ongoing strength in the boxed beef market is supportive for live cattle futures this morning. Choice beef values rose $1.22 yesterday and Select was up $1.54 on solid movement of 176 loads.
  • This week's showlist is smaller than last week, but packers say beef prices must continue to improve to encourage them to raise cash bids. Cash trade is expected to be delayed until Friday.
  • Live cattle are also expected to be supported by spillover from the U.S. stock market, which should see a lift from news the Bank of Japan will ramp up its bond buying program.

 

Lean hog futures are called steady to lower on weakness in the pork cutout market.

  • Lean hog futures are expected to face pressure due to weakness in the pork cutout market, as values slipped $1.37 yesterday.
  • Meanwhile, the cash hog market is called steady to $1 higher as some plants are in need of additional supplies for later in the week. Traders say this signals a near-term cash low has been posted.
  • Average hog weights dropped 1.6 lbs. last week in the Iowa/southern Minnesota market. Traders say this signals the worst may be behind in terms of herd liquidation.
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