Market Snapshot, Noon CT (VIP) -- October 30, 2012

October 30, 2012 06:56 AM
 

 

The U.S. stock and bond markets are closed today, but there are plans to resume trade Wednesday. Electronic trading in the energy and metal markets is operational today, but floor trade is closed.

Corn futures have pared gains to trade mostly fractionally to 3 cents higher.

  • Corn futures continue to enjoy spillover support from soybeans, along with short-covering encouraged by weakness in the U.S. dollar index.
  • Trading interest and fresh news is limited today due to the highly disruptive storm event on the East Coast.
  • Light support comes from news UkrAgroConsult trimmed its corn production estimate for the region by 200,000-MT to 18.8 MMT.
  • Ideas slow planting in Brazil and Argentina will cause producers to shift more corn acres to soybeans is also mildly supportive.
  • But softer basis levels for corn signals supplies are moving to market and limited export demand for U.S. corn.
  • Emphasizing this is talk Egypt purchased 20,000 MT of corn from South America, which follows purchases of 180,000 MT from South America Monday.

 

Soybean futures continue to enjoy double-digit gains in most contracts, though the market has backed off its highs.

  • After heavy losses yesterday, soybean futures are benefiting from bargain buying and corrective short-covering. Dollar weakness is encouraging to that end.
  • Soy demand remains solid, as illustrated by yesterday's export inspections report and news China's Ministry of Commerce raised its October soybean imports forecast from 3.66 MMT to 4.22 MMT. This compares to imports of 4.97 MMT in September.
  • Traders continue to monitor the weather in South America. Too much rain in southern Brazil and Argentina and too little rain in other areas of Brazil has delayed planting. While this is worrisome for the crop, it also ups the odds more acres will be switched to beans.

 

Wheat futures have softened to favor the downside in choppy trade.

  • Early gains in wheat gave way to profit-taking. The market will continue to chop sideways until fresh supply or demand news arises.
  • Tighter global wheat stocks, especially from the Black Sea region, are expected to give U.S. wheat a boost on the global export market, but that has not yet occurred.
  • Dryness on the U.S. Plains will keep a floor under the market as it has slowed winter wheat emergence.

 

Live cattle futures have softened to narrowly mixed trade. Feeder cattle futures have seen choppy trade today. Most contracts are currently favoring the upside.

  • Early gains in live cattle futures encouraged light profit taking.
  • Also encouraging this is unconfirmed talk of light cash cattle trade in Kansas at $126, down $1 from trade there the week prior. Most are passing on these prices, however.
  • Packers have been reluctant to raise bids as they continue to cut in the red and are concerned that beef demand will soon slow in the face of lofty prices and hurricane destruction on the East Coast.
  • But the boxed beef market has surged forward this week. This morning, Choice boxed beef cuts firmed $1.47 and Select values rose $1.40. Movement slowed to 73 loads, however.
  • Feedlots feel beef strength and tighter showlist estimates justify at least steady cash trade.

 

Lean hog futures are enjoying slight to moderate gains, with the exception of the front-month, which is slightly lower.

  • Futures continue to enjoying corrective short-covering after heavy losses yesterday.
  • Some firmer cash hog bids in the Midwest as packers work to secure supplies for mid-week needs is adding support.
  • But packer demand is generally light as two Indiana plants have reduced kill hours, one due to mechanical issues and another due to slowed demand from the East Coast.
  • The pork cutout value firmed 9 cents yesterday, but movement slowed to 29.75 loads, also pointing to reduced meat demand, possibly due to Superstorm Sandy.
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