Market Snapshot, Noon CT (VIP) -- August 1, 2012

August 1, 2012 07:06 AM
 

 

Corn futures are mostly 10 to 15 cents lower amid profit-taking, but off session lows.

  • With little fresh news for the market to digest, traders are opting to take some profits out of the market as they wait on the conclusion of the Federal Open Market Committee (FOMC) meeting this afternoon.
  • Somewhat limiting pressure on prices, however, is ongoing concern about the crop as private crop estimates continue to decline.
  • Gulf corn basis is steady to a penny lower for immediate shipment as there's no fresh demand news to report.

 

August through January soybean futures have sharply extended losses to trade 30 to 50-plus cents lower. Farther deferred futures are posting losses mostly in the 7- to 13-cent range.

  • August soybean futures briefly traded 70 cents lower ahead of midday.
  • Weather models show improved rainfall chances for the Corn Belt. Rainfall of 0.5 to 1.2 inches is expected across much of the Corn Belt over the next few days.
  • The outside market watch is also resulting in a "risk off" mentality as traders wait for the conclusion of the FOMC meeting this afternoon. If the Fed disappoints, it could take some steam out of the commodity sector.
  • August soybean futures have moved off session lows after coming within a penny of the key $16.50 level.

 

Many wheat futures at all three exchanges are posting double-digit losses, with Minneapolis leading declines. Far-deferred futures are mixed in Chicago and Kansas City, while Minneapolis is lower across the board.

  • Wheat is seeing spillover from neighboring pits and a lack of fresh news, leading to stepped-up profit-taking.
  • Crop concerns in Russia and Ukraine continue, but neither country is signaling any export curbs will be needed. Ukraine's ag ministry has pledged a two-month warning before they would act to limit exports.
  • Minneapolis wheat futures are leading losses as harvest-related hedge pressure builds. While demand for high-protein HRS wheat is strong, basis is softening.

 

Live cattle futures are slightly lower in all but the December contract, while feeder futures have extended gains sharply.

  • Feeder cattle futures have strengthened on weakness in the corn market, which is helping to limit pressure on live cattle futures.
  • Boxed beef prices are 25 to 27 cents softer this morning, but movement remains relatively strong with 160 loads changing hands.
  • Cash cattle trade is expected later in the week as asking prices are bids are far apart.

 

August lean hog futures are slightly higher, while deferred months are lower.

  • Pressure on August lean hog futures is being limited by the discount the contract holds to the cash index.
  • Cash hog bids are steady to $1 lower as packers are not anticipating problems securing near-term supplies as herd liquidation talk is building.
  • Deferred lean hog futures are being pressured by the herd liquidation concerns as that would increase supplies at a time when hog numbers build seasonally.
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