Grain Drift Lower Overnight

October 23, 2012 01:42 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: 4 to 5 cents lower. Strength in the U.S. dollar index is weighing on corn futures this morning. December corn is hovering around $7.55 as the market continues to chop in its sideways trading range. There's little fresh news for the market to digest, so much of the direction in corn is coming from neighboring pits. But a "risk-off" attitude this morning is triggering light profit-taking.

Soybeans: 9 to 12 cents lower. Futures are weaker this morning on strength in the U.S. Dollar index, but futures so far have remained within the boundaries of yesterday's trading range. Rains are needed in areas of central and northern Brazil, but corn planting delays due to flooding could result in a switch to more soybean acres there. But with soybean harvest in the U.S. winding down, more focus is being put on demand, which remains strong.

Wheat: 4 to 7 cents lower. Futures are seeing spillover from neighboring pits as well as weakness from strength in the U.S. Dollar index. Wheat needs to move above last week's highs in order to signal a near-term low has been posted and the market is capable of generating enough momentum to move back to the top of the extended choppy consolidation range. But fresh demand news is needed to spur fresh buying in futures.

Live cattle: Mixed. Futures are expected to see a choppy start, with traders watching for cash clues. Yesterday's Cold Storage Report came within traders' expectations and reflected a decline from year-ago and month-ago levels. Boxed beef values continue to improve, with Choice values up $1.67 and Select up $1.08 on strong movement to start the week of 160 loads. This week's showlist is up slightly from last week, so key will be if beef movement remains strong.

Lean hogs: Lower. Futures are called lower in reaction to yesterday's Cold Storage Report that showed record pork stocks at the end of September. The figure also came in around 10 million lb. above the average trade guess and raises concerns about demand. Meanwhile, pork cutout values slipped 41 cents yesterday to tighten packers' profit margins. The cash hog market is expected to be steady to weaker.


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