Market Snapshot, Noon CT (VIP) -- December 17, 2012

December 17, 2012 05:47 AM
 

The March through March 2014 corn contracts remain 4 to 8 cents lower, with farther deferred contracts mixed.

  • Corn futures remain under pressure due to a lack of fresh demand news.
  • While this morning's weekly export inspections data showed corn inspections of 15.016 million bu., which was above expectations, the cumulative pace slipped further behind year-ago.
  • Gulf corn basis is fully steady at midday to reflect some stability in the cash market, but it also suggests no fresh demand news is on the horizon.
  • Additional pressure is coming from rains over the weekend across the Corn Belt, with more in the near-term forecast.
  • Meanwhile, very wet conditions continue across portions of central Argentina, raising the risk some corn acres will shift to soybeans.
  • March corn futures must hold support at last week's low of $7.15 to remain within the long-lasting choppy range.

 

January soybean futures are slightly firmer. Deferred months are mostly 2 to 5 cents lower.

  • Soybean futures remain weaker on profit-taking after trading higher ahead of the start of open-outcry trade.
  • Traders are slightly disappointed by this morning's weekly export inspections data that showed inspections of 36.990 million bu., which fell below expectations. Cumulative inspections slipped from last week, but are still well ahead of what's needed to reach USDA's export projection.
  • Additionally, fresh demand news this morning suggests China is still on its buying binge. USDA announced a 151,000-MT soybean sale to unknown destinations, with 91,000 MT for 2012-13 and 60,000 MT for 2013-14..
  • Private consulting firm AgRural raised its Brazilian soybean production estimate to a record 82.2 MMT, from 81.9 MMT previously, as growing conditions have improved through the first half of December. Crop conditions are largely favorable through Brazil.
  • January beans are pivoting around the $15.00 level, which is a psychological resistance.

 

Wheat futures are mostly 7 to 8 cents lower on spillover from corn.

  • With no fresh news for the market to digest, wheat is following corn lower this morning.
  • Weekly wheat inspections of 16.355 million bu. came in above expectations, but were largely ignored as traders recognize U.S. supplies are not price-competitive on the global market.
  • Additional pressure is coming from improved rainfall chances for the Central Plains this week, although little rain is forecast for Texas.
  • March Chicago wheat futures are being supported above last week's low of $8.01 1/2, which if violated, could trigger a round of sell stops.

 

December live cattle futures remain sharply higher, with other contracts slightly higher. Feeder cattle futures are moderately higher.

  • December live cattle are sharply higher despite starting the week at a premium to last week's $124 to $125 cash trade.
  • If futures are able to hold gains into mid-week, it would increase the odds packers will pay steady to firmer cash cattle prices compared to week-ago.
  • February live cattle futures gapped higher on the open and extended gains, but have returned to near opening levels.
  • Feeder cattle futures are pulling support from unexpected price strength in live cattle and a softening of corn futures.

 

Lean hog futures are under slight pressure at midday.

  • Lean hog futures are under light pressure as traders recognize packers' profit margins have slipped and nearby futures are trading at a premium to the cash index.
  • Meanwhile, the cash hog market is steady to $1 higher as packers work to secure this week's needs and say they are already working on next week's holiday-interrupted schedule.
  • But traders are cautious as there are concerns packer demand for cash hogs could wane with the average cutting margin below breakeven again.
     
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