Market Snapshot, Noon CT (VIP) -- December 27, 2012

December 27, 2012 05:59 AM
 

Corn futures are around 1 to 2 cents lower amid a lack of fresh positive news.

  • Without fresh positive news for the corn market to digest, focus is on risk aversion after the Consumer Confidence Index plunged in December.
  • Another reminder that high prices are curbing demand comes from news Taiwan has canceled a tender for U.S. corn due to high prices.
  • Additional pressure comes from bearish technicals, which point futures lower near-term. March corn futures are hovering above support at last week's low of $6.87 1/2.

 

Soybean futures have reversed course and are 2 to 5 cents lower amid risk aversion.

  • Early gains gave way to profit-taking as the U.S. dollar index is now firmer and traders are shedding risk due to concerns fiscal cliff talks have stalled.
  • Additional pressure comes from more rains in the near-term forecast for dry areas of Brazil, which will help with establishment and pod fill of the early developing crop.
  • News Taiwan Sugar Corp. canceled a tender to import 12,000 MT of U.S. beans is also weighing on futures.
  • January soybean futures have slipped below yesterday's low. Next support is last week's low of $14.02 3/4.

 

Wheat futures are 3 to 6 cents lower on spillover from neighboring pits and general risk aversion.

  • Without fresh demand news, wheat is vulnerable to spillover from neighboring pits and negative outside markets.
  • The U.S. dollar index has firmed on disappointing consumer confidence data. Commodity futures are also seeing a general risk-off day of trade due to concerns Congress will not reach a fiscal cliff deal by year's end.
  • Recent precip with more in the forecast for the Southern and Central Plains also makes it difficult for wheat to find buyers.

 

Live and feeder cattle futures remain mostly moderately lower at midday.

  • Live and feeder cattle futures are seeing profit-taking, as well as spillover from weakness in the U.S. stock market due to fiscal cliff worries.
  • Traders are also waiting on cash cattle trade to begin and are concerned weakness in futures could cause packers to lower bids from last week's $126 to $127 trade.
  • But expectations supplies will continue to tighten into 2013 is limiting selling.
  • Feeder cattle futures are also facing profit-taking pressure as the January contract is at roughly a $3 premium to the cash index.

 

Lean hog futures are slightly to moderately lower amid profit-taking.

  • Traders are working to narrow the premium nearbys hold to the cash index.
  • Additional pressure comes from fiscal cliff uncertainties and December's plunge in consumer confidence.
  • Traders are also reducing risk ahead of tomorrow afternoon's Quarterly Hogs & Pigs Report. The report is expected to show a drop in farrowing intentions compared to year-ago levels.
  • The cash hog market is mostly steady again today, with packers saying they have plenty of supplies to draw from as they prepare for another holiday-shortened kill schedule next week.
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