Market Snapshot, Noon CT (VIP) -- January 7, 2013

January 7, 2013 06:00 AM
 

Corn futures have pared early gains to trade steady to 3 cents higher.

  • Corn futures continue to benefit from ideas the downside was overdone last week and hopes export demand is improving.
  • This morning, USDA announced a 102,200 MT corn sale to unknown destinations for 2012-13. And Gulf basis levels firmed for near-term delivery this morning and at midday, signaling more demand news may be on the horizon.
  • But the market will needed to see proof of improved corn export demand before throwing money at the long side of the market as exports have been lackluster for a long time.
  • Also, investors will likely be unwilling to add risk ahead of USDA reports Friday, especially considering that this set of releases has caused major price moves the last several years.
  • Corn export inspections for the week ended Jan. 3 fell short of expectations, encouraging some light profit-taking.

 

Soybean futures have trimmed early gains slightly to trade fractionally to 11 cents higher with nearbys leading to the upside.

  • Soybean futures continue to enjoy light, corrective short-covering.
  • A weekly soybean export inspections tally of 39.652 million bu. met expectations that signal the pace of exports remains much stronger than needed to meet USDA's export forecast. This along with dollar weakness is supporting bean futures.
  • But favorable South American growing conditions and the start of harvest for some early planted beans limits the market's upside potential.
  • Also limiting willingness to add positions are the upcoming USDA reports Friday.
  • Steady to lower Gulf basis this morning and steady basis at midday signals fresh demand news is not on the horizon.

 

Wheat futures have seen choppy trade this morning, but futures at all three locations are now enjoying slight gains.

  • Early corrective gains in the wheat market have given way to light profit-taking at times this morning.
  • Rain in the forecast for the Southern and Central Plains has made it difficult for wheat to sustain buying interest.
  • In addition, while this morning's weekly wheat export inspections tally of 13.363 million bu. met expectations, the tally was nothing to get excited about.
  • Traders are also beginning to even positions ahead of Friday's key reports, which include the Winter Wheat Seedings Report.

 

Live cattle futures remain narrowly mixed at midday. Feeder cattle futures are still under slight pressure.

  • Cattle futures are choppy as traders are waiting for more signals with which to form this week's cash cattle trade prospects.
  • Last week, cash trade took place at mostly $128, which was mostly up $1 from trade on the Southern Plains the week prior. But trade was generally light, which means feedlots will have excess animals to market this week.
  • Also adding to near-term uncertainty is a choppy start to boxed beef trade. This morning, Choice cuts slid $1.06 while Select cuts rose 46 cents. Movement was strong at 120 loads.
  • Gains in the corn market are encouraging light profit-taking in feeder cattle futures after strong gains last week.

 

Lean hog futures have improved to narrowly mixed trade.

  • Cash hog bids are mixed today with plants in the eastern Corn Belt paying mostly steady prices and those in the western Belt paying up to $2 lower prices in an effort to improve negative profit margins.
  • There has been talk some plants may trim kill hours this week to improve their margins.
  • On Friday, pork prices rose and movement was solid, but more will be needed to pull packer profit margins out of the red and support the cash market.
  • Outside markets are also providing little direction, as the U.S. dollar index is favorably lower, but the stock market and crude oil futures are also under pressure.
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