Market Snapshot, Noon CT (VIP) -- January 14, 2013

January 14, 2013 11:23 PM
 

Old-crop corn futures continue to enjoy gains in the teens, while new-crop contracts are around 4 to 6 cents higher.

  • The corn market continues to benefit from USDA's reports that reflected tighter-than-anticipated corn supplies.
  • Corn is also benefiting from strong spillover support from the soybean market.
  • But buying interest, especially in deferred contracts, is being limited by ongoing weak export demand.
  • Reminding the market of this was softer basis levels for immediate delivery this morning.
  • Also, though weekly corn export inspections of 9.239 million bu. met expectations, the pace of inspections continues to slide relative to year-ago.

 

Soybean futures continue to rally with most contracts now posting gains in the 30s to 40s.

  • Early gains in the soybean market triggered buy stops as the market moved through key levels of resistance.
  • Initial support stemmed from more signs soybeans have finally reached levels exporters deem as a "value."
  • This morning, USDA announced China purchased 120,000 MT of U.S. soybeans for 2012-13. Steady to firmer Gulf basis levels signal more demand news may lie ahead.
  • This morning's export inspections tally of 39.123 million bu. also reminded the market of consistently solid soy demand. This tally met expectations.
  • Similarly, while this morning's NOPA data showed crush for December around a million bu. below expectations at 159.9 million bu., this was still a 2.6 million bu. increase from the month prior and a strong figure. Soyoil stocks of 2.6 billion lbs. met expectations.

 

Chicago and Kansas City wheat continue to enjoy gains in the teens while Minneapolis wheat is roughly 7 to 10 cents higher.

  • Wheat is enjoying followthrough buying after USDA on Friday pegged both wheat carryover and winter wheat seedings below pre-report expectations.
  • Support also stems from reports from a Russian agency that up to 25% of the country's wheat crop may have been damaged by winterkill.
  • Similar concerns also apply to the winter wheat crop on the U.S. Central Plains where temps have recently been below 0°F and there is no protective snow cover.
  • Traders are ignoring this morning's weekly wheat export inspections tally that came in below expectations and week-ago at 10.598 million bushels.

 

Live cattle futures remain narrowly mixed at midday. Feeder cattle have trimmed early losses to trade slightly lower.

  • Cash trade took place at mostly $126 in the Southern Plains and at mostly $125 in northern locations last week. As futures are at a significant premium to these levels, they are facing light profit-taking pressure.
  • But broad gains across the commodity sector has also encouraged light short-covering at times today.
  • Also encouraging light short-covering is gains of 11 cents for Choice boxed beef and 69 cents for Select boxed beef cuts this morning. Movement was also decent at 96 loads.
  • Light support also comes from news that U.S. Meat Export Federation analysis of USDA data showing U.S. beef exports as of November are running slightly above 2011 record levels in terms of value.
  • Strength in the corn market continues to pressure feeder cattle futures as this signals higher feed prices going forward.

 

Lean hog futures continue to enjoy slight gains at midday in all but far-deferred contracts, which are mixed.

  • Cash hog bids are variable today as some packers in need of supplies have raised bids while others have lowered bids to improve negative margins.
  • Light support stems from news U.S. pork exports for the first 11 months of 2012 are running ahead of the record-setting pace in 2011 both in terms of volume and value, according to the U.S. Meat Export Federation's analysis of USDA statistics.
  • Improvement in the pork cutout market Friday, both in terms of movement and price, is also providing light support.
  • Beef prices are expected to hit record highs in 2013 due to tight supplies; bulls are hopeful this will translate into increased demand for cheaper pork.
  • Strong pork export demand is also expected to remain supportive. On Friday, USDA raised its pork export forecast for 2013.
     
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