Corn and Soybeans Weaker Overnight on Profit-Taking

August 3, 2012 01:38 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: 5 to 7 cents lower. Futures are weaker amid profit-taking, but haven't done any technical chart damage. Yesterday's large sale to Mexico helped to limit pressure on corn futures yesterday as it suggests panic buying from the country. But the start of harvest (although very early) is infusing some corn into the system. Weather is largely factored into the market and it would now take a yield surprise to return focus to the weather.

Soybeans: 3 to 5 cents lower. Futures are weaker this morning on a wetter weekend forecast and rains that moved across portions of the Corn Belt last night and this morning. But a "drought-breaking" rain isn't expected, which is concerning as the crop has entered its key pod-filling stage. November beans are working on slight gains for the week and a close above $16.00 for the week would not be bearish.

Wheat: 2 to 3 cents higher. Wheat is mostly higher this morning amid short-covering, with additional help coming from weakness in the dollar index. Wheat was pressured yesterday as the dollar index posted a bullish reversal, but the lack of followthrough buying this morning is encouraging short-covering in wheat futures.

Live cattle: Steady to higher. Futures are expected to see followthrough from yesterday's gains, with traders reacting to yesterday's late-in-the-day cash cattle trade that occurred at $3 to $4 above last week's trade at $118. Strong beef movement this week forced packers to pay up for cattle and makes traders more comfortable with the premium nearby contracts hold to the cash index.

Lean Hogs: Mixed. Futures are expected to see a mixed start following yesterday's sharp losses. Short-covering is expected to lift nearby contracts, but concerns about sow liquidation pressuring the cash market near-term has left traders comfortable with the discount nearby contracts hold to the cash index.


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