Futures Face Profit-Taking on Calendar Flip to August

August 1, 2012 01:31 AM

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Overnight highlights. Following are highlights of overnight trade (as of 6:30 a.m. CT) and opening livestock calls:

Corn: 9 to 13 cents lower. Futures have seen choppy trade so far this session, but are currently extending losses amid profit-taking. Clear-cut signs that high prices are slowing use is limiting traders' bullish enthusiasm about the dwindling crop. December corn is pivoting around last week's high of $7.90.

Soybeans: 9 to 21 cents lower. Futures have turned lower after trading higher earlier in overnight trade. Making it more difficult for soybeans to rally is signs of rationing of corn supplies, but there are still no signs that soybean demand has slowed dramatically. In fact, Chinese demand is expected to stay strong as their supplies are tight. With soybeans entering the key pod-filling stage under stress and no rain is in sight, there is more upside price potential, although the "easy money" has been made.

Wheat: 15 to 22 cents lower. Wheat futures at all three exchanges are posting double-digit losses, with Chicago the downside leader with nearbys trading 20-plus cents lower. While global crop concerns linger, supplies are still thought to be adequate this year and signs of rationing in the corn market make traders concerned the same is ongoing for wheat. September Chicago wheat futures have slipped to a fresh session low, making support last week's low of $8.52 3/4.

Live cattle: Mixed. Futures are expected to be mixed as traders wait on cash cattle trade to begin. Traders are counting on $1 to $2 higher trade with last week's $114 trade, which is encouraging traders to maintain the premium nearbys hold to the cash market. Beef values were slightly higher again yesterday on strong movement of 202 loads, which should improve demand for cash supplies this week.

Lean Hogs: Mixed. Futures are expected to be mixed this morning, but bears currently have technical momentum on their side after futures saw light followthrough pressure yesterday after Monday's sharp losses. Traders are concerned that increased sow liquidation will be too much for the pipeline, especially since there are concerns about domestic demand given this summer's heat. Pork values were steady yesterday and the cash hog market is called steady with a weaker tone as packers work to improve profit margins.


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