Market Snapshot, Noon CT (VIP) -- December 19, 2012

December 19, 2012 06:05 AM

Corn futures have softened to trade double-digit lower in nearby contracts with deferred months seeing slightly lighter losses.

  • Spillover pressure from soybeans and general risk aversion caused selling to pick up in the corn market today.
  • And the market extended losses on news Informa Economics reportedly expects 2013 corn planted acreage of 99.026 million, which is up from 2012 and last month's projection.
  • But pressure is being limited by recognition of tight supplies, which is reflected by recent imrovement in Gulf basis levels.
  • A major winter storm event is expected to dump significant, needed precip on the Corn Belt beginning today, which limits buying interest.


Soybean futures have extended early losses to trade 20-plus cents lower through the July contract.

  • Early pressure on soybeans triggered sell stops as the market moved through key support levels.
  • The recent selloff can largely be attributed to yesterday's soybean order cancellations and beneficial precip for Brazil that up the odds of a record-large bean crop.
  • Ongoing fiscal cliff uncertainty that was heightened by the president's threat to veto the latest GOP proposal and the resulting unwillingness to add risk add to the negative tone.
  • Informa Economics reportedly projects 2013 soybean planted acreage at 79 million, which is down from its November projection, but still higher than 2012 planted acreage.


Wheat futures have softened to post losses around 5 to 7 cents in Chicago and Kansas City with Minneapolis seeing slightly lighter losses.

  • Spillover from corn and especially soybeans have returned some profit-taking to the wheat market.
  • But signs that the recent price drop has finally made U.S. wheat competitive on the export market is limiting selling interest.
  • This morning USDA announced Egypt purchased 110,000 MT of HRW wheat for 2012-12, which was followed by news Egypt's state-owned buyer (GASC) has purchased 180,000 MT of SRW wheat for February shipment.
  • Plus, news Russia's SovEcon estimates the country's wheat stocks as of Dec. 1 stand at are down 40% from the year-prior reminds traders of tightening Black Sea region supplies.
  • Informa Economics reportedly expects winter wheat seedings to total 42.198 million acres, which is slightly below the firm's November estimate, but 874,000 acres above last year's seedings, though the firm did reportedly cite concerns about slow emergence.
  • Informa also reported pegged all wheat acreage at 56.8 million, which is up 1 million acres from last year.


Live cattle futures continue to enjoy slight to moderate gains in most contracts. Feeder cattle futures are moderately higher.

  • Traders are favoring the upside as they wait for cash cattle trade to get underway.
  • While packers are buying for a holiday shortened week and they continue to cut in the red, the winter storm event could make it more challenging to secure supplies.
  • Boxed beef market performance this morning adds to the bullish tone, as Choice boxed beef values firmed 58 cents and Select rose $1.68 and movement was strong at 136 loads.
  • Also supportive are expectations for Friday's Cattle on Feed Report to show On Feed and Placements well below year-ago levels, with Marketings near-steady with last year. This is a reminder of tightening supplies.
  • But buying interest is being limited by the fact that nearby futures are already at a $4-plus premium to last week's cash prices.
  • Feeder cattle futures are benefiting from short covering thanks to weakness in the U.S. dollar index and corn futures.


Lean hog futures are also enjoying mostly slight to moderate gains at midday.

  • Expectations the blizzard that is forecast to hit the Corn Belt tonight will disrupt hog transportation, thereby tightening supplies, are supporting the cash hog market and thus futures today. Bids are mostly steady with a few packers placing higher bids.
  • Also, a surge in the pork cutout value in both movement and price yesterday signal retailers plan to feature pork after the holidays. Some believe pork will benefit early in 2013 as consumers turn away from historically high beef prices in the new year.
  • Also supportive is news average hog weights in Iowa/southern Minnesota fell 1.3 lbs. from last week, which signals supplies are current.
  • A weaker U.S. dollar index is also supportive of livestock buying.
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