Market Snapshot, Noon CT (VIP) -- December 6, 2012

December 6, 2012 06:01 AM
 

Corn futures remain near session lows, trading 4 to 7 cents lower on disappointing export sales and negative outside markets.

  • The U.S. dollar index is sharply higher this morning, which is resulting in widespread selling in the commodity world.
  • This morning's weekly export sales data showed corn sales well below expectations, which is adding to the negative price tone. Sales of 51,600 MT for 2012-13 and net sales reductions of 4,200 MT for 2013-14 were a big disappointment.
  • Conab projects Brazil's corn crop at 71.9 MMT, near the bottom of its previous crop range of 71.6 MMT to 72.9 MMT.
  • Gulf corn basis was steady to firmer this morning but at midday is fully steady.
  • March corn futures are pivoting around the psychologically significant $7.50 level.

 

Soybean futures are mixed, with the January through July contracts 1 to 2 cents higher and farther deferred months 3 to 7 cents lower.

  • Upside potential for nearby futures is being limited by negative outside markets, led by a firmer dollar.
  • Conab projects Brazil's 2013 soybean harvest at 82.6 MMT, saying conditions are mostly favorable. Previously, Conab pegged the crop between 80.1 MMT and 83 MMT.
  • Nearby futures are favoring a firmer tone on further indications demand is not being adequately rationed. This morning's weekly export sales data showed soybean sales well above expectations. Sales of 1,142,700 MT for 2012-13 and 1,100 MT for 2013-14 were reported.

 

Wheat futures at all three exchanges are mostly 3-plus cents lower.

  • The combination of strength in the dollar index and a disappointing weekly export sales tally of 353,100 MT are weighing on wheat futures at midday.
  • But ongoing concerns about drought in the U.S. Southern Plains is keeping crop concerns on traders' minds. This morning's National Drought Monitor reflects worsening drought in the HRW wheat belt.
  • March Chicago wheat futures have extended early losses and are hovering above support at this week's low of $8.51 1/2.

 

Live cattle futures are steady to slightly lower, with feeder cattle futures firmer on weakness in corn futures.

  • Continued weakness in the boxed beef market has traders looking for $1 to $2 lower cash cattle trade compared with last week's $125 to $126 trade.
  • Choice boxed beef values slipped 57 cents and Select is down $1.24 this morning on moderate movement of 98 loads.
  • Negative outside markets are limiting buying in live cattle futures, although the Dow Jones Industrial Average hasn't strayed too far from unchanged today.
  • Weekly export beef sales of 14,000 MT for 2012 were an improvement from last week's tally of 11,800 MT.
  • Weakness in the corn market is supportive of short-covering in feeder cattle futures.

 

Lean hog futures are moderately to sharply lower on indications the cash market has posted a near-term high.

  • Packers say this week's needs have largely been secured and indications retail buying of hams has eased has traders anticipating a near-term cash high has been posted.
  • The cash hog market is mostly steady this morning, but some lower bids are being reported as packers work to improve negative margins.
  • December hog futures are now trading much more in line with the cash index ahead of next week's expiration.
  • February lean hog futures gapped below uptrending support drawn off September and November lows and have extended losses. Followthrough pressure tomorrow would strongly suggest a near-term high has been posted.
     
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