End-of-The-Month Position Squaring

October 31, 2012 01:40 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: 1 to 4 cents higher. Futures are expected to see light followthrough from yesterday's gains, with support coming from weakness in the U.S. dollar index and strength in the U.S. stock market. After a two-day shutter due to Hurricane Sandy, the NYSE and Nasdaq are set to execute their first trades this morning. Given this is the last trading day of the month, price action across the financial markets will be active and that will influence grain markets.

Soybeans: 9 to 12 cents higher. Futures are seeing support from weakness in the U.S. dollar index as well as firmer basis levels. Traders say improvement in basis signals a strong weekly export sales report should be ahead later this week. Traders will also evening positions as they close their books for the month and keeping a close eye on financial markets after they were closed for two days.

Wheat: 4 to 9 cents higher. Wheat is seeing a boost from neighboring pits this morning as well as help from positive outside markets. There are also reports of disappointing yields in Australia. But futures continue in their downtrending channels established from summer highs. Downside risk is being limited by tightening global supplies, although the U.S. has not seen a dramatic pickup in export business.

Live cattle: Steady to firmer. Futures are expected to build on yesterday's price improvement thanks to gains in the beef market. Choice values firmed $1.47 and Select was up $1.40 yesterday. But movement slowed to just 73 loads. Cash cattle trade got underway yesterday at steady to $1 lower with last week, but remaining locations are waiting on higher bids.

Lean hogs: Mixed. Futures are called mixed after yesterday's bout of short-covering. Upside potential will be limited by concerns about the cash market, as pork cutout values slipped 46 cents yesterday. But movement was very strong at 123.25 loads, which somewhat eases concerns about pork demand due.


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