Market Snapshot, Noon CT -- July 30, 2012

July 30, 2012 07:06 AM
 

Corn remains mostly 9 to 19 cents higher, which is near session highs amid ongoing weather concerns.

  • The ability of the corn market to remain near session highs signals traders remain concerned about crop prospects. December corn is pivoting around $8.15.
  • A Reuters survey signals traders expect the portion of crop rated "good" to "excellent" will decline by three percentage points from last week to 23%.
  • Both the forecast for this week and the mid-range outlook includes above-normal temps and limited rainfall chances. As a result, traders are expecting private crop estimates to continue to decline.
  • This morning's weekly export inspections data showed corn inspections above expectations at 21.438 million bushels.
  • Gulf corn basis has improved to be steady to firmer.

 

Soybeans are trading 30-plus cents higher, which is midrange for the day.

  • Soybean futures gapped higher on the open, extended gains and are now trading midrange for the day. November beans are pivoting around $16.35.
  • This morning's weekly export inspections data showed soybean inspections of 15.498 million bu., which was within expectations and above the pace needed to reach USDA's export forecast.
  • Gulf basis is mixed, but steady to weaker for nearby delivery.
  • Given last week's disappointing rainfall and extreme heat, traders look for this afternoon's crop condition report to reflect deteriorated. Based on a Reuters survey, the "good" to "excellent" categories are expected to decline by two percentage points to 29%.
  • China halted sales of state-owned soybeans last week as stockpiles sold out. But sales are set to resume this week, with 400,000 metric tons (MT) up for auction.

 

Wheat futures at all three exchanges are trading in the upper quarter of today's trading range. Chicago wheat is mostly 12 to 17 cents higher, with Kansas City wheat mostly 13 cents higher. Nearby Minneapolis wheat is mostly 11 to 13 cents higher.

  • Wheat futures continue in a follower's role and are enjoying spillover from strength in the corn market. However, strength in the dollar is limiting buying interest in wheat futures.
  • This morning's weekly export inspections report was also supportive, as wheat inspections of 18.601 million Bu came in above traders' expectations.
  • Additional support is coming from crop concerns in the Black Sea region as drought is lowering production prospects there, especially in Russia, Ukraine and Kazakhstan.
  • There is heightened talk Russia's government could sell some stocks from its intervention supplies to stabilize domestic prices in regions that are most affected by drought.

 

After a choppy morning, live cattle futures have strengthened to trade slightly to moderately higher. Feeder cattle have trimmed losses, with the August and September contracts now higher.

  • Strength in the boxed beef market is providing encouragement for cattle traders this morning. Boxed beef values are 58 (Choice) to 59 (Select) cents higher on solid morning movement of 95 loads.
  • Traders are waiting on an "official" showlist count for the week, but most expect more animals to be marketed this week as many producers held animals back last week in hope for higher prices this week.
  • Feeder cattle futures have moved off session lows amid short-covering, but buying is being limited by strong gains in the corn market.

 

August lean hog futures are lower, while the rest of the market is moderately to sharply higher.

  • Deferred futures are leading gains as traders expect surging feed costs to lower farrowing intentions, and therefore supplies for later in the year and into 2013.
  • The cash hog market is mostly steady, although firmer tones are being seen in some areas as supplies have tightened.
  • Cash sources are also reporting producers are culling herds amid rising feed prices. That will increase near-term supplies, which is weighing on August futures.
     
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