Market Snapshot, Noon CT (VIP) -- October 29, 2012

October 29, 2012 06:57 AM

The U.S. stock market is closed today, the CME Group closed its stock market futures and options trade at 8:15 a.m. CT and the bond market closed at 11 a.m. CT -- all due to Hurricane Sandy. Pit trading at the NYMEX is also closed today, although electronic trading on the exchange is open. Closure of Federal government offices on the East Coast also means USDA's crop progress data will not be released today.

Corn futures have softened to trade around a penny lower.

  • Spillover pressure from soybeans and strength in the U.S. dollar index has encouraged light selling in the corn market.
  • While weekly corn export inspections came in just above expectations at 15.516 million bu., the commutative export pace is now running 36.6% behind last year. USDA forecasts 2012-13 exports will lag year-ago by 25.5%.
  • But still strong basis levels around the U.S. and dryness in areas of Brazil remind the market of tight supplies and continue to limit selling interest.


Soybean futures have extended early losses to trade 30-plus cents lower through the March contract, while farther deferred months are seeing losses in the teens to 20s.

  • Early profit-taking in the soybean market triggered sell stops amid light trading volume due to Hurricane Sandy-related trade disruptions.
  • Early pressure stemmed from ideas rains in Brazil over the weekend will improve planting prospects, but central and northern areas of the country remain dry.
  • Traders ignoring signs that high prices are not rationing use.
  • For one, China's Xinhua news agency reports that China will import a record 57.5 MMT of soybeans this year according to the country's ag ministry.
  • And this morning's weekly export inspections tally of 63.358 million bu. topped lofty expectations. Commutative export inspections are running 48.7% ahead of last year's pace, whereas USDA forecasts exports will be down 7% from year-ago.


Wheat futures have weakened to trade roughly 4 to 6 cents lower in Chicago and Kansas City while Minneapolis wheat is seeing slightly lighter losses.

  • It is a quiet news day for wheat, so a firmer U.S. dollar is weighing on futures.
  • Also adding pressure, weekly wheat export inspections of 9.7 million bu. fell short of expectations and declined significantly from the week prior.
  • But downside risk remains limited by ideas U.S. wheat will eventually benefit from slowed exports from the Black Sea region.
  • Dryness in U.S. winter wheat country also limits downside risk. Recent crop progress reports show winter wheat emergence lags the average pace due to dryness.


Live cattle futures have improved to choppy trade. Feeder cattle futures have softened to post moderate losses in most contracts.

  • Improvement in the boxed beef market after heavy losses Friday has encouraged light short-covering in cattle futures. This morning, Choice boxed beef values rose 79 cents while Select cuts fell 43 cents. Movement was decent at 87 loads.
  • Light support also comes from the fact that nearby futures are at around a $1.50 discount to last week's mostly $127 cash cattle trade in the Plains.
  • But buying interest is limited as Hurricane Sandy is expected to trim meat demand and disrupt beef exports over the near-term.
  • Feeder cattle futures are being pressured by demand concerns as well as high feed costs.


Lean hog futures have softened to post moderate to sharp losses at midday.

  • Hurricane Sandy is expected to reduce demand for meat, adding to ideas the hog market has put in a near-term top.
  • On Friday, the pork cutout value softened, though movement was decent.
  • The cash hog index softened for the first time in many weeks today. It declined 38 cents to $84.86.
  • Cash hog bids are steady to lower today as packer profit margins have recently softened and supplies are plentiful.
  • Dollar strength is an additional source of pressure.
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