Pro Farmer Senior Markets Editor
From Pro Farmer
Updated as of 7:00 a.m. CT
Grain markets still dealing with Monday's
reports... Monday's USDA reports have put a damper on bullish
optimism. Following sharp losses in the corn market, all the corn market to
get yesterday was a slight short-covering bounce. Sharp declines in the crude
oil market this week have also limited upside potential to short-covering. Crude
oil was firmer overnight amid short-covering, but there too, attitudes are bearish
amid the economic slowdown.
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Opening calls. These calls originate
more than three hours before the open -- use caution, things change:
Corn: 1 to 2 cents lower. Futures were weaker overnight following
yesterday's slight gains to maintain a choppy tone. Futures finished around
4 cents higher, which was in the middle of yesterday's range. Futures struggled
to find buyer interest through much of the morning, but benefited from light
short-covering in late trade. Still, bears have momentum on their side as
today's modest gains were no more than a correction to sharp losses to start
Soybeans: 1 to 6 cents lower. Futures were weaker overnight to maintain
this week's choppy tone. Futures saw a choppy day of trade. January beans
finished around 8 cents higher, with March steady. The rest of the pit closed
marginally to 3 cents lower. Outside markets limited upside potential in the
soy complex and contributed to pressure in morning trade.
Wheat: 2 to 4 cents lower. Futures were weaker overnight on
spillover from neighboring pits. Wheat futures saw a choppy day of trade,
but didn't stray too far from unchanged in either direction. Chicago wheat
closed 3 to 4 cents higher. March Chicago wheat spent the day pivoting around
the 38% retracement level of the rally from the December low to the January
high. Futures respected support at the halfway point of the range, which lies
Cash cattle expectations: $1 to $2
higher. So far, no notable cash cattle activity has taken place in the
Plains, although barring a sharp collapse in cattle futures, traders and cash
sources generally expect cash trade in the $85 to $86 range. Weather could impact
cattle trade as extremely bitter cold temps have invaded the Midwest and parts
of the Plains.
Futures call: Mixed. Futures are expected to see a choppy start as
traders wait on cash trade to begin. February live cattle poked below Monday's
low at $82.75, but failed to find fresh seller interest at that level. Contract-low
support lies at $80.60. Key near-term resistance is at the 40-day Moving Average
around $85.50. A push above that level could spark fresh chart-based buying.
Cash hog expectations: Steady to
weaker. Most packers have this week's slaughter needs covered as some have
reduced kill runs amid slumping margins. The combination of kill needs being
covered, slowed hog movement due to bitter cold temps across the Midwest and
a $1.64 drop in the average pork cutout value Wednesday could cause packers
to shift focus and work on trying to improve slumping margins. As a result,
cash hog bids are seen no better than steady at most locations today.
Futures call: Mixed. Futures finished near session highs in all but the February contract, which closed mid-range. Futures are called to open mixed as price action could be choppy amid spreading. The cash index has risen sharply so far this month, to help trim the premium futures hold, but futures are also responding by moving lower as feel the premium is still too much. February hogs hold just a $3 premium to the index, which is much more in line.