Johnston Pro Farmer Senior Markets Editor
as of 7:00 a.m. CT
Waiting on Changers
to act... While the government's bailout plan remains under fire,
stock futures are set Congress higher this morning on news Warren Buffett has
injected $5 billion into Goldman Sachs. Traders say they view this as a vote of
confidence from Buffett the bailout plan will be approved by Congress.
proposed $700 billion bailout plan has met lawmaker resistance in Washington,
with the primary complaints relative to a lack of help for homeowners and no limits
on executive compensation. Some lawmakers are also bristling at calls for quick
action on such a large package. Another hearing is on tap today for the plan.
In two days this week, the Dow has fallen more than 4.5%.
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Opening calls. These calls originate
more than three hours before the open -- use caution, things change::
Corn: 7 to 10 cents higher. Futures gapped slightly lower on the open
yesterday, but quickly filled the gap. While futures spent most of the day below
unchanged, they rallied late to close 1 1/2 to 3 1/4 cents higher. The dollar
gained strength yesterday, while crude oil and gold were sharply lower amid uncertainty
over whether or not Congress would enact the bailout plan proposed by the Treasury
and Fed. Traders watched testimony this morning from Fed Chairman Ben Bernanke
and Treasury Secretary Henry Paulson as they provided details to Congress.
17 to 19 cents higher. Futures settled mostly 17 to 18 cents lower, which
was right in the middle of the day's range and near opening levels. With fundamentals
pushed to the back burner for now, focus will remain on outside markets in the
overnight session and again Wednesday. November soybean futures entered Monday's
upside chart gap, but failed to fill the gap. Support at the bottom of the gap
is at $11.57. Initial resistance is at Monday's high of $12.12.
4 to 7 cents higher. Despite price-negative trade in outside markets, wheat
favored the upside through much of yesterday's session. Light short-covering and
technical-based buying provided the bulk of the support. Given the low-volume
session, a modest uptick in buyer interest late actively extended gains to produce
the high-range close. That would typically signal followthrough buying is likely
Wednesday, but it will be hard for wheat to extend gains if outside markets and
neighboring pits don't participate.
cattle expectations: Watching beef trade. Boxed beef prices firmed
36 to 84 cents Tuesday, but movement slowed to 200 loads. Despite the sluggish
performance in the boxed beef market so far this week, most cash sources and traders
are favoring a slightly firmer tone in the cash cattle market. But there's still
plenty of cash uncertainty.
Futures call: Mixed. Futures
are called to open mixed as traders expect choppy price action to continue as
they wait on cash trade to develop. Futures closed mostly around 50 cents lower
yesterday amid profit-taking pressure. Price action was largely technical in nature,
with traders keeping a close eye on outside markets.
hog expectations: Steady to weaker. Some packers began lowering cash
hog bids Tuesday as market-ready hog supplies are plentiful. Given the 86- cent
drop in the pork cutout value Tuesday on the heals of an 80-cent decline Monday,
cash hog bids are expected to be steady to lower at most Midwest locations today
-- and the remainder of the week.
Futures call: Mixed. Futures
are called to open mixed after closing near the middle of yesterday's range in
most contracts. December hogs paced the decline with a $1.05 loss. Outside market
support that spurred speculative buying in the hog market Monday was not present
today. In fact, outside markets were price-negative, which triggered profit-taking
pressure in hog futures.