Market Snapshot, Noon CT (VIP) -- July 31, 2012

July 31, 2012 07:01 AM
 

 

Corn futures remain slightly lower amid profit-taking.

  • Traders are opting to take some profits out of the market due to signs high prices are curbing feed, export and ethanol demand.
  • But pressure on the market so far has been limited by ongoing crop concerns after yesterday's crop condition report showed continued crop deterioration.
  • December corn posted a fresh contract high of $8.20 1/2 earlier and is now pivoting around $8.10. Support lies at last week's high of $8.00.

 

Soybeans have once again firmed to trade mostly 4 to 9 cents higher, with meal and soyoil enjoying spillover support.

  • Soybean futures have seen a choppy morning of trade, but have once again firmed to positive trade due to ongoing crop concerns.
  • The forecast calls for above-normal temps across the main soybean production areas of the U.S. through mid-month, along with just scattered rainfall chances. As a result, traders expect the crop to remain under stress during the key pod-filling stage.
  • November beans are pivoting around $16.50, which is mid-range for the day.

 

Nearby wheat futures are posting double-digit losses at all three exchanges. Far-deferred futures are mixed in Kansas City and Chicago, while Minneapolis is weaker.

  • Nearby wheat futures are following corn lower. Outside markets are choppy, as the US dollar index, crude oil and gold are lower.
  • Russia's ag ministry lowered its estimate of the 2012 grain crop to 80 million metric tons (MMT) from the previous range of 80 MMT to 85 MMT and Interfax news agency says the ministry may cut its outlook to 75 MMT if drought persists. Despite the reduced crop prospects, Russia's prime minister says the country will retain its exportable grain surplus.
  • Additional pressure in Minneapolis contracts comes from stepped-up hedge-related pressure as harvest picks up momentum.
  • Jordan purchased 100,000 metric tons (MT) of wheat -- likely Black Sea region.

 

Live cattle futures have extended losses to trade slightly to moderately lower, while feeder futures have firmed.

  • Traders are working to narrow the premium nearby live cattle futures hold to last week's $114 cash cattle trade. Bids and asking prices remain several dollars apart, signaling cash trade may be delayed until later in the week.
  • Boxed beef prices are firmer again this morning on improved movement of 111 loads. Continued strength in the product market would give feedlots more bargaining power in this week's cash negotiations.
  • Feeder cattle have firmed, with support coming from profit-taking in the corn market.

 

After a firmer start, lean hog futures have weakened, with nearbys $1-plus lower.

  • Nearby lean hog futures are leading losses on concern with the cash market. Cash bids are steady to 50 cents lower amid lackluster demand as packers work to improve margins.
  • Cash sources say some plants may need additional hogs for late-week delivery, but the increase in sow slaughter amid stepped-up herd liquidation, is increasing pork supplies.
  • Pressure on deferred futures is being limited by expectations pork production will tighten down the road.
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