Market Snapshot, Noon CT (VIP) -- November 20, 2012

November 20, 2012 06:05 AM
 

Corn futures have improved to trade roughly 3 to 5 cents higher.

  • Traders are unwilling to be short the corn market ahead of what will be a holiday-extended weekend for many as the corn market has recently benefited from signs that export demand is improving.
  • Gulf corn basis levels have surged this week, signaling fresh export demand news likely lies ahead and/or low water levels on the Mississippi River are disrupting shipping.
  • Adding to such ideas are reports congestion at Brazilian ports are causing exporters to source their near-term needs with U.S. corn.
  • Gains are being kept in check by slight dollar strength amid ongoing euro-zone concerns.

 

Soybean futures have reversed early losses and staged a strong rally to trade double-digits higher with nearby contracts up 15 to 18 cents.

  • A surge in Gulf basis levels and recent soyoil buys have sparked ideas soybeans are at value levels considering tight supply prospects.
  • Plus, yesterday's news China will stop its auctions of state soybean reserves signal the U.S. may soon see even stronger buying interest from Chinese importers.
  • And while the South American bean crop is expected to be record-large, Brazil's recent troubles shipping corn remind the market that such troubles are commonplace in South America. Plus, the bulk of the growing season with its inherent risks lies ahead.

 

Wheat futures are enjoying gains ranging from 1 to 5 cents, with Chicago and Minneapolis wheat as the upside leader and Kansas City seeing the lightest gains.

  • The wheat market was again reminded of the poor start to the U.S. winter wheat growing season yesterday with the release of USDA's Crop Condition Report. And the seasonal outlook does not call for drought relief.
  • Plus, the market expects the U.S. to soon benefit from dwindling supplies from the Black Sea region. Ukraine will halt exports on Dec. 1, and Russian supplies are dwindling.
  • But buying interest is limited by light trading volume and dollar strength.

 

Live cattle futures are enjoying slight gains in most contracts. Feeder cattle futures continue to post slight losses.

  • Ideas supplies will tighten in the year ahead and signs of beef demand strength are giving traders a bullish bias as they even positions ahead of the Thanksgiving holiday.
  • This morning, Choice boxed beef cuts rose 45 cents and Select cuts firmed 93 cents; movement was very solid at 131 loads.
  • This plus tighter showlist estimates gives feedlots some bargaining power.
  • Cash cattle trade is still up in the air as it's uncertain if packers will try to buy cattle ahead of Thanksgiving or after returning from the holiday.
  • Strength in the corn market is putting light pressure on feeder cattle futures.

 

Lean hog futures have improved to post slight gains in most contracts.

  • Light profit-taking this morning has given way to modest buying. Action ahead of the holiday will likely remain choppy amid light trading volume.
  • Giving bulls an edge are expectations pork demand will improve over the holidays and that supplies will tighten starting in the first quarter of 2013.
  • On the other hand, the pork cutout value posted another decline yesterday and Wednesday's Cold Storage Report is expected to point to record-large frozen pork stocks at the end of October.
  • Pork movement this morning was solid, however, at 28.25 loads.
  • Plentiful supplies and limited demand ahead of the holiday is keeping cash hog bids steady to mostly lower today.
     
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