Followthrough Buying in Grains

January 15, 2013 12:37 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: Mostly 1 to 2 cents higher. Corn futures are favoring a firmer tone in mixed trade following yesterday's high-range close. Even just light followthrough buying is positive on the charts this morning as March corn is challenging $7.30, which signals a near-term low has been posted.

Soybeans: 4 to 8 cents higher. Futures are mostly 7 to 8 cents higher this morning on followthrough from yesterday's gains. Building on yesterday's gains strongly suggests a near-term low has been posted. Futures are being supported by improved export demand and concerns about the weather in South America.

Wheat: 3 to 8 cents higher. Futures are enjoying spillover from neighboring pits as well as followthrough from yesterday's gains. Traders still have last week's tighter-than-expected carryover peg on their minds and weather concerns in the U.S. Southern Plains, but more technical chart improvement is needed to declare the market has posted a near-term low.

Live cattle: Mixed. Ideas recent losses are overdone is expected to result in some short-covering this morning. But buying will be limited as bears have near-term momentum on their side and this week's cash trade is still undecided.

Lean hogs: Steady to weaker. Futures are expected to be slightly lower this morning after yesterday's choppy tone, with pressure coming from concerns about packers' negative profit margins. Pork cutout values slipped 48 cents yesterday. As a result, the cash market is expected to be steady to weaker as packers work to improve margins.


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