Grains Enjoy Short-Covering Overnight

October 30, 2012 01:41 AM

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Overnight highlights. Following are highlights of overnight trade (as of 6:40 a.m. CT) and opening livestock calls:

Corn: 2 to 5 cents higher. Futures are enjoying short-covering, but remain within the boundaries of the choppy consolidation range. Weakness in the U.S. dollar index is supportive of commodity buying this morning, but another choppy day could be ahead as the U.S. stock market is closed for a consecutive day due to the remnants of Hurricane Sandy. Also, a lack of fresh news for the corn market could keep trade subdued.

Soybeans: 5 to 7 cents higher. Futures are enjoying light short-covering following yesterday's sharp losses that violated uptrending support draw off recent lows. But not major technical chart damage was done yesterday as the contract remains within the boundaries of this month's choppy consolidation range. Futures were also pressured yesterday by rains moving into drier areas of Brazil, although Mato Grosso missed out on the precip, which is stalling planting.

Wheat: 4 to 7 cents higher. Wheat is enjoying spillover from neighboring pits, as well as short-covering from weakness in the U.S. dollar index. Wheat posted a low-range close yesterday and violated support at the previous week's low in many instances. Therefore, short-covering this morning is helping the market to avoid doing any technical chart damage.

Live cattle: Mixed. Futures are expected to be mixed following yesterday's sharp loses on some short-covering. Some support is expected to come from yesterday's solid start to the boxed beef market, as Choice values were up 68 cents and movement was strong at 151 loads. But Select values declined 62 cents and traders are concerned about "lost" beef demand due to the massive storm along the East Coast.

Lean hogs: Mixed. Futures are called mixed on some short-covering after nearby futures violated uptrending support yesterday to signal a near-term high has been posted. While this is a negative development, weakness in the U.S. Dollar index is expected to help firm the market this morning. Still, there are concerns about the cash market this week given reduced demand for hogs as some eastern Belt plants are going to be closed again today.


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