Market Snapshot, 8:30 am CT (VIP) - January 8, 2013

January 8, 2013 02:37 AM
 

Corn futures are marginally to 1 cent lower, although trade has been choppy.

  • Corn futures haven't strayed too far from unchanged in overnight trade, with buying limited by strength in the dollar index.
  • Price action could remain choppy this week as traders prepare for Friday's key USDA reports. Traders look for USDA to raise carryover from last month due to dismal export demand.
  • Sources report South Korea has purchased more than 315,000 MT of optional-origin corn (all South American) since Friday to capitalize on the latest decline in price.
  • Argentine growing conditions have improved marginally, but growers there are still struggling to plant the last 20% of the 2012-13 corn crop. Limited production potential in Argentina should limit downside risk in corn prices.

 

Soybean futures are 1 to 4 cents lower on light profit-taking after yesterday's gains.

  • Strong commercial buying was noted yesterday which would imply strong demand, but no fresh news has been reported for that to be verified.
  • Meanwhile, drier areas of northern Brazil are expected to see rain this week, which would further improve crop prospects. Rain remains plentiful in southern Brazil.
  • Chinese soybean imports in January may fall to 4.6 million tons compared to around 5.4 million tons in December, the state-backed China National Grain & Oils Information Center says.
  • Traders are also focused on evening positions ahead of Friday's key USDA reports, which are expected to show a slight increase in carryover from last month.

 

Wheat futures are mostly 2 to 3 cents higher amid short-covering.

  • Wheat futures are due for a period of short-covering to correct the severely oversold condition of the market, but have a lot of work ahead in order to improve the bearish technical situation.
  • Some support is coming from expectations USDA will tighten wheat carryover slightly in Friday's report.
  • Rains in the Southern Plains this week will limit buying interest.
  • State weather forecasters say Ukraine's winter grains crops are rated much better than year-ago but 12% of the crop is underdeveloped and vulnerable to winterkill.

 

Live cattle futures are called to open mixed as traders continue to gauge cash signals.

  • Beef prices started the week mixed, with Choice values down 77 cents and Select up 38 cents on strong movement of 207 loads.
  • Cash sources confirm this week's showlist is higher than last week after many feedlot balked at packers' bids last week.
  • Uncertainty surrounding this week's trade will maintain a choppy tone in futures. February live cattle are trading at around a $6 premium to last week's cash market, signaling traders' attitudes toward the cash market remains bullish due to tightening supplies.
  • Feeder cattle futures are called mixed as traders keep an eye on corn futures.

 

Lean hog futures are called to open mixed, with buying limited by concerns about packers' margins.

  • Pork cutout values firmed 22 cents to start the week, but packers' margins are still in the red.
  • Pork movement was moderate to start the week at 58.5 loads.
  • The cash hog market softened yesterday at some locations, which signals packers are having no difficulty securing needed supplies.
  • Still, cash sources look for mostly steady bids today as some packers are still in need of late-week supplies.
  • February lean hog futures are trading at around a $3 premium to the cash index, which signals traders are cautiously optimistic toward cash.
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