Corn Favor Slight Gains Overnight

August 26, 2011 01:33 AM

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

Corn: Marginally to 1 cent higher. Futures choppy around unchanged in overnight trade, with pressure limited by disappointing results from the Pro Farmer Midwest Crop Tour. The Tour confirmed traders' fears this year's crop is not big enough to meet demand needs and price rationing is needed. Corn futures are technically strong.

Soybeans: 1 to 3 cents lower. Futures saw light profit-taking overnight, with pressure limited by crop concerns and weakness in the U.S. dollar. The Midwest Crop Tour found some disappointing, but also some solid pod counts. Key at this point is getting the moisture to fill the pods. The near-term outlook doesn't favor pod fill in the Midwest as we flip the calendar to September next week. Technically, the market is knocking on the door of some very important resistance levels. A move above the spring highs could prove to be explosive.

Wheat: 4 to 6 cents lower. Wheat has been in a leadership role for much of the week, which is impressive given volatility in outside markets and focus on corn and soybean crops during the Crop Tour. There are some holes in the global wheat crop, as rains are threatening crop quality in Germany and spring wheat yield results continue to disappoint in the U.S. Northern Plains. Technically currently favor bulls.

Live cattle: Mixed. Futures are called to open mixed on a combination of followhrough from yesterday's late-session gains and profit-taking. All eyes will be on Federal Reserve Chairman Ben Bernanke as he speaks at the confab in Jackson Hole, Wyoming, at 9:00 am CT. After $1 to $2 lower cash cattle trade got underway on Wednesday in the Southern Plains, expectations were for similar bids to wrap up this week's showlists. But steady cash trade in Nebraska was reported yesterday, which helped to firm futures.

Lean hogs: Weaker. Futures are called to open weaker based on stepped up pressure on the pork cutout market. Pork cutout values slipped $1.93 yesterday to trim packers' profit margins. With packers booked well into next week, expectations are for steady to weaker bids to continue near-term. However, with nearby lean hog futures at a steep discount to the CME lean hog index, downside risk from cash weakness should be limited.


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