Market Snapshot, Noon CT (VIP) -- August 14, 2012

August 14, 2012 07:05 AM


Nearby corn futures are favoring the upside while deferred months are mixed.

  • Nearby corn futures are benefiting from some light short-covering this morning amid ongoing concerns about the drought-stricken crop. Yesterday USDA confirmed slight deterioration in the crop last week.
  • Though the crop does not stand to benefit from milder weather, the lower temps and rain chances are making investors hesitant to actively add long positions.
  • Basis levels at Gulf locations were steady to lower at midday, pointing to slowed end user demand.


August soybean futures have pared gains to the 20s, while other contacts are enjoying slight gains.

  • Soybean futures are enjoying some corrective short-covering today as traders recognize supplies remain tight.
  • This morning's NOPA soybean crush data topped expectations at 137.38 million bu. Soyoil stocks came in slightly higher than expected at 2.345 billion pounds. This gives weight to ideas more supply rationing is needed.
  • Gulf basis levels were steady to higher this morning and steady at midday, also pointing to still-strong demand.
  • But as seen in yesterday's crop condition rating improvement, the soybean crop still stands to benefit from the shift to milder weather, which has encouraged light profit-taking.


Wheat futures have extended losses to post losses of roughly 9 to 14 cents in Chicago and Kansas City and slight losses in Minneapolis.

  • Wheat futures need strong support from corn to rally, and the market's choppy action today doesn't fit the bill. This has left wheat vulnerable to profit-taking.
  • This morning, Egypt's state-owned wheat buyer purchased 120,000 metric tons (MT) of wheat from Russia and Ukraine (evenly split between the countries) for September delivery, reminding traders that high prices make U.S. wheat less competitive.
  • Today's action indicates the market sees global crop concerns as factored into prices.


Nearby live cattle have improved to post slight gains, while deferred months slightly lower. Feeder cattle futures are moderately to sharply higher.

  • Live cattle futures improved thanks to a surge in boxed beef prices this morning -- Choice boxed beef values rose $2.32 and Select cuts firmed $2.34. Movement also improved to 98 loads, pointing to some late Labor Day buying.
  • While showlist estimates have yet to be released, supplies generally tighten seasonally at this time of the year.
  • The fact that futures are already at a premium to last week's cash cattle trade is capping buying interest.
  • Feeder cattle futures are benefiting from ideas a top in the corn market is near or in place.
  • Outside markets are mildly supportive -- the stock market is firmer and the U.S. dollar index is near breakeven.


Lean hog futures are posting slight losses in all but the October contract, which is firmer.

  • The October lean hog contract is benefiting from the near $15 discount it holds to the cash hog index; it will be the new front month tomorrow.
  • The rest of the market is seeing light profit-taking as supplies are building seasonally. This has resulted in steady to lower cash hog bids, despite positive packer profit margins.
  • Strong morning movement of 25.25 loads is limiting selling interest as the market is hopeful this signals improvement over recent pork market action.
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