Market Snapshot, 8:30 am CT (VIP) -- September 21, 2012

September 21, 2012 03:44 AM
 

Corn futures are 2 to 3 cents higher amid lackluster trading interest.

  • Corn is seeing a lift on short-covering following yesterday's losses but is still working on sharp weekly losses as harvest-related hedge pressure has temporarily weakened the cash market.
  • A weaker U.S. dollar index is also supportive for commodity markets this morning as this week has featured sluggish global economic data.
  • Gulf corn basis is steady for nearby delivery but softer for deferred delivery.

 

Soybeans are 2 to 9 cents higher on light short-covering spurred by weakness in the U.S. dollar index.

  • Following yesterday's losses, soybean futures are seeing very light short-covering support, but the market is hovering just above support at weekly lows.
  • USDA announced a sale of 140,000 metric tons (MT) to soybean cake and meal to South Korea for 2012-13, but a lack of soybean sales announcements this week has traders concerned demand has slowed.
  • Official customs data from China signals soybean imports declined 1% in August from a year earlier to 4.42 million MT, but year-to-date imports are still up 17.4% from the same period last year.

 

Nearby wheat futures at all three exchanges are mostly 8 to 10 cents higher amid tightening global supplies, with deferred contracts seeing lighter gains.

  • Russia is sending mixed signals on grain export restrictions. While ag officials insist the country is not considering restrictions, an economic ministry overnight said such restrictions were "entirely possible" if domestic prices continue to rise.
  • Dryness in the U.S. Southern Plains is also worrisome as producers are delaying the start of actively seeding winter wheat.
  • Outside markets are also supportive of buying in the wheat pit this morning, as weakness in the U.S. dollar index is resulting in gains in crude oil and gold futures.

 

Live cattle futures are called mixed as traders wait on active cash cattle trade.

  • Cash cattle trade got underway yesterday in the Plains at around $126, which was steady to $1 lower with the bulk of last week's trade. But trade wasn't active as many feedlots passed on those bids due to continued strength in the beef market and tight market-ready supplies.
  • Choice beef values firmed 7 cents yesterday and Select was up 29 cents on strong movement of 184 loads. It's impressive that Choice values at $194.99 are still attracting strong demand.
  • Traders will also be focused on evening positions ahead of this afternoon's Cattle on Feed Report, expected to reflect a tightening feedlot situation.

 

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

  • Pork cutout values rose $2.19 yesterday, largely led by sharp gains in rib values though all cuts saw gains. This is expected to translate into steady to $1 higher cash hog bids as some packers are still in need of additional loads for Saturday's kill.
  • Upside potential, however, could be limited as traders even positions for this afternoon's Cold Storage Report, which is expected to show record stocks for the end of August.
  • USDA reports pork production in August was a record for the month at 2 billion pounds.
  • October lean hog futures are working on strong weekly gains and ended yesterday at a $6.75 premium to the cash index, which could also limit today's gains.
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