Dismal Reaction to USDA Reports

December 11, 2012 02:07 AM

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Overnight highlights. Following are highlights as of 8:07 a.m. CT and opening livestock calls:

Corn: 3 to 5 cents lower. Futures came off their early lows in reaction to this morning's smaller-than-expected carryover peg of 647 million bu., which is steady with last month. Traders expected USDA to raise carryover slightly. Weakness in the U.S. dollar index is also supportive of commodity buying this morning. But buying is being limited as the data didn't provide any bullish surprises.

Soybeans: 4 to 10 cents lower. Futures have weakened since the release of USDA's data, despite the fact USDA trimmed carryover by 10 million bu. to 130 million bushels. Traders are disappointed USDA left its export forecast unchanged, although it increased crush. Pressure is being limited by ongoing strong demand, as USDA announced another daily soybean sale this morning to China.

Wheat: 8 to 13 cents lower. Wheat futures are lower this morning in reaction to USDA's higher-than-expected carryover peg of 754 million bushels. The estimate is 50 million bu. above last month and traders only around a 14-million-bu. increase. Chicago and Kansas City futures are posting double-digit losses, with Minneapolis seeing lighter losses.

Live cattle: Mixed. Live cattle futures are expected to see a choppy start as traders wait on clearer direction from the cash market. Boxed beef prices were firmer yesterday, but only 150 loads changed hands. This signals retailers have holiday purchases booked, which could also limit packers' demand for cattle.

Lean Hogs: Mixed. Lean hog futures are expected to see a choppy start as traders reevaluate positions. Pork cutout values slipped 59 cents yesterday on sluggish movement of 40.25 loads. With most packers still cutting in the red, demand for cash hogs has been reduced.


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