Focus on End-Of-The-Week Position Squaring

October 14, 2011 01:27 AM

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

Corn: 1 to 3 cents higher. Futures saw a lightly traded session overnight, seeing light gains on spillover from crude oil futures. It's been a week full of news and USDA will release its weekly export sales data this morning which traders will be following closely. A boost in end-user buying this week featured a large sales announcement to China, which signals prices are a value. December corn is consolidating around $6.40 and working on gains for the week.

Soybeans: 5 to 7 cents higher. Futures saw two-sided trade overnight, but as of lately were higher following yesterday's high-range close. Soybean futures surged into the close on improvement in Gulf basis, which increased rumors of China buying U.S. beans. Bean futures are working on strong weekly gains, signaling seasonal lows are behind. Limiting near-term upside potential will be ongoing concerns about the struggles in the euro-zone, as it has limited speculative buying in the commodity markets.

Wheat: 3 to 6 cents higher. Futures were stronger overnight on spillover from neighboring pits and short-covering. Price action in the wheat market has been volatile this week, with December Chicago wheat working on posting slight gains for the week. Early in the week it appeared the market was working on an upside breakout, but then USDA unexpectedly raised carryover and pointed global stocks up -- that returned focus to concerns about the competitiveness of U.S. wheat.

Live cattle: Mixed. Following yesterday's gains, live cattle are due for some profit-taking to move nearby futures in line with this week's lower cash cattle trade at $119. Cash trade is expected to wrap up at similar levels today. But instead of focusing on lower cash yesterday, futures rallied into the close as the market remains concerned about tightening supplies and the lack of herd rebuilding.

Lean Hogs: Mixed. Futures are expected to be mixed today ahead of the expiration of the October contract at noon CT today. October hogs are trading in line with the cash index, but December, which holds around a $6 discount to the cash index, will soon be the lead-month contract. Traders are comfortable with some discount to cash factored in as building supplies near-term are expected to maintain pressure on the cash market. Early expectations are for weaker bids to linger into next week.


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