Market Snapshot, 8:30 am CT (VIP) -- September 27, 2012

September 27, 2012 03:44 AM
 

Corn futures are 7 to 10 cents lower on additional signs demand is being rationed.

  • Corn is seeing followthrough pressure from yesterday's late news that feed buyers in the U.S. Southeast have purchased Brazilian corn to counter tight U.S. supplies.
  • This morning's weekly export sales data is also highly disappointing, as it showed net corn sales of just 400 metric tons (MT) due to several cancellations.
  • Traders are also not willing to take on risk ahead of tomorrow morning's Quarterly Grain Stocks Report, which will set carryover for 2011-12.
  • And confirmation the U.S. economy grew even slower than initially reported in the second quarter is adding to concerns about the economy.
  • South Korean feedmakers continue to extend coverage on the price break, however, with purchases totaling 266,500 MT of South American and optional origin supplies.

 

Soybean futures are mostly 7 to 11 cents lower in volatile trade.

  • Stepped-up, harvest-related hedge pressure and disappointing economic data is giving bears the upper hand, although pressure is being limited by fresh demand news.
  • Weekly export soybean sales of 799,500 MT for 2012-13 came in near the top end of expectations. The cumulative bookings pace is running much more swift than needed to reach USDA's export projection.
  • Also this morning, USDA announced a 110,000-MT soybean sale to China for 2012-13, signaling the country is ready to step back in to secure purchases.

 

Wheat futures have improved to trade mixed, but spillover pressure from corn and soybeans is keeping most contracts below unchanged.

  • Expectations wheat supplies in the Black Sea region are dwindling quickly and will lead to improved demand for U.S. wheat is helping to limit pressure on futures this morning.
  • The Ukrainian Agrarian Confederation says the country has exported 2.4 million metric tons (MMT) of wheat since the beginning of its marketing year out of the 3.2 MMT likely to be exported by mid-October.
  • The National Drought Monitor reflects worsening drought across the Plains, although rains this week are expected to ease the intensity of drought.
  • Weekly wheat export sales of 426,000 MT were within expectations.

 

Live cattle futures are called to open mixed. The market is due for a short-covering bounce on ideas recent losses are overdone, but a weak cash market will limit buying.

  • Sharp pressure on futures so far this week is expected to give way to some short-covering given tightening supplies, especially with October live cattle futures trading at a slight discount to this week's $123 cash cattle trade.
  • Cash cattle trade began yesterday at $3 lower prices than last week, but many feedlots are holding out for better prices.
  • While boxed beef prices were softer again yesterday, movement has picked up.
  • Feeder cattle futures should be supported by weakness in the corn market.

 

Lean hog futures are called steady to firmer on continued cash improvement.

  • The cash hog market is called steady to higher across the Midwest today as packers say they are still working to secure a large Saturday kill and supplies have eased somewhat.
  • The pork cutout value firmed 32 cents yesterday on strong movement of 101 loads. This signals the market is working through hefty supplies.
  • Traders are also actively beginning to even positions ahead of Friday afternoon's Quarterly Hogs & Pigs Report, which is expected to show farrowing intentions below year-ago levels and All Hogs & Pigs at 100.7% of year-ago.
     
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