Market Snapshot, 8:30 am CT (VIP) -- September 4, 2012

September 4, 2012 03:42 AM
 

Corn futures are 6 to 9 cents higher on spillover from soybeans.

  • Corn futures are benefiting from spillover from soybean futures, as well as disappointing Midwest harvest results.
  • USDA announced Japan purchased 180,000 metric tons (MT) of corn for 2013-14, signaling some panic buying has entered the market.
  • Technically, corn remains in its sideways trading range. The market is either getting tired at historically high prices or gaining momentum for the next move higher.

 

Soybean futures are mostly 18 to 22 cents higher as traders work to find a price that rations supplies.

  • Soybean futures posted contract highs in overnight trade amid concerns the market has not yet found a price that slows use.
  • Meanwhile, China's Ministry of Commerce lowered its estimate for August soybean imports to 4.53 million metric tons (MMT) from its earlier forecast of 5.3 MMT, saying crushers have slowed purchases due to declining profit margins.
  • China's official purchasing managers' index (PMI) for August dropped below 50, which suggests the government will likely take more actions to boost its economy.

 

Wheat futures are 2 to 5 cents higher at all three exchanges on spillover support.

  • Futures are enjoying spillover from neighboring markets, although buying is being limited by choppy outside markets.
  • Egypt purchased 365,000 MT of Russian, Ukrainian and Romanian wheat over the weekend for shipment in October. This signals U.S. prices are currently not competitive on the global market.
  • India's food ministry announced the government will release 1.3 million MT of wheat onto the domestic market to ease prices.

 

Live cattle futures are called to open mixed as traders gauge holiday beef movement.

  • Traders will be gauging the boxed beef market this week for signs of weekend clearance. If beef movement is strong to start the week, it would suggest packer demand for cash supplies could be strong.
  • However limiting upside potential will be the premium nearby live cattle contracts hold to last week's $2 to $3 higher cash cattle trade at $123.
  • Feeder cattle futures are called to open lower based on strength in the corn market.

 

Lean hog futures are called to open steady to lower amid plentiful supplies.

  • Packers are having no difficulty securing needed supplies, which has them working to improve profit margins by lowering cash hog bids.
  • Pressure on nearby lean hog futures should be limited by the sharp discount those contracts already hold to the cash index, which stands at $80.29.
  • Traders will be watching the pork cutout market closely for signs retailers are switching to pork features for fall.
     
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