Bears Hold Momentum in Grain Markets

October 3, 2011 01:36 AM

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Overnight highlights. Following are highlights of overnight trade and opening calls:

Corn: 12 to 15 cents lower. Futures faced followthrough pressure in overnight trade from Friday's sharp to limit lower performance. Traders reacted on Friday to USDA's higher-than-expected corn stocks estimate, which set 2010-11 carryover at 1.13 billion bushels. On to of increased harvest-related pressure, the stocks estimate somewhat alleviates the market's supply concerns. The U.S. dollar index is stronger this morning, adding to the negative tone. December corn violated support at the July low of $5.75 1/2 overnight.

Soybeans: 9 to 12 cents lower. Futures saw followthrough pressure overnight from Friday's losses, as well as spillover from corn and negative outside markets. The U.S. Dollar index is stronger this morning, as investors perceive economic problems abroad worse than here. Traders are also still hearing of better-than-expected soybean yield reports, leading them to expect the October Crop Production Report will show a yield jump. Bears hold the near-term technical advantage.

Wheat: 5 to 9 cents lower. Futures were weaker overnight on spillover from neighboring pits and strength in the U.S. Dollar index. As the calendar flips to October, bears hold momentum in the commodity markets. Wheat futures saw a highly volatile day on Friday as traders reacted to the smaller-than-expected wheat production estimate as well as sharp losses in neighboring pits.

Live cattle: Steady to firmer. Bulls hold momentum in cattle futures heading into the new month, as futures posted sharp gains last week in reaction to tightening supplies and higher cash cattle trade. Key to building on last week's cash strength will be if the boxed beef market strengthens this week. October live cattle are trading at a premium to last week's cash cattle trade, signaling traders have a positive bias built it.

Lean Hogs: Steady to firmer. Futures are called to open steady to firmer on followthrough from Friday's gains, but mixed trade could be seen as traders reevaluate positions. Traders faded last week's Hogs & Pigs Report as they focused on strong demand. Nearby futures are vulnerable to some profit-taking given the premium they hold to the cash index.


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