Beef Market Strengthens, Pork Prices Weaken

November 16, 2011 12:29 AM
 

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

Corn: 3 to 4 cents lower. Following yesterday's gains, corn futures were slightly lower overnight amid dollar strength. Corn remains comfortable in its long-lasting sideways trading range and unless there's any fresh demand news, it's likely to stay that way through the holidays.

Soybeans: 5 to 6 cents lower. Futures saw choppy trade overnight, but are currently favoring a weaker tone amid dollar strength. Soybeans posted double-digit gains yesterday, but remain in the lower half of the month-long trading range. Futures rose yesterday on hopes China will ease its monetary policy, making it easier for importers to secure lines of credit. That spurred rumors of China buying U.S. beans and purchases of 500,000 metric tons of U.S. beans have been confirmed by exporters.

Wheat: 2 to 6 cents lower. Futures saw lackluster price action overnight, with futures slightly lower amid dollar strength and spillover from neighboring pits. Without fresh demand news, wheat will struggle to move higher unless neighboring pits test resistance levels. While Chicago wheat continues at a discount to corn, without demand traders aren't willing buyers.

Live cattle: Steady to higher. Futures are expected to see followthrough from yesterday's gains given continued strength in the beef market. Choice beef values were $1.85 higher yesterday and Select rose $1.06 on strong movement of 221 loads. Cash cattle trade isn't expected until later in the week, as there's been no active bidding. But given this week's smaller showlist, expectations are for at least steady bids with the top of last week's cash range of $124 to $125.

Lean Hogs: Steady to weaker. Futures are expected to be weaker on pressure in the pork cutout market. Pork values slipped $1.40 yesterday to trim packers' profit margins, although movement was very strong. The cash hog market is expected to remain under pressure as packers say they are having no difficulty securing needed supplies, which remain ample. Outside markets are expected to add to the negative tone today.


 

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