Grain Futures Face Light Pressure Overnight

September 13, 2011 01:43 PM

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Overnight highlights.

Following are highlights of overnight trade and opening calls:

Corn: 3 to 6 cents lower. Futures saw profit-taking in overnight trade following yesterday's bullish reversal. While yesterday's USDA report showed the crop within traders expectations, the market quickly firmed in reaction to the still-tight stocks situation. USDA trimmed demand, but in order to achieve this, prices must be higher. A higher close today following yesterday's bullish reversal would be positive technically.

Soybeans: 6 to 8 cents lower. Futures saw followthrough pressure from yesterday's sharp losses and bearish reversals, with nearbys ending around 30 cents lower yesterday in reaction to USDA's negative reports. Traders were shocked that USDA increased the U.S. soybean yield by 0.4 bu. per acre from last month and pumped up carryover. This reduces the "urgency" of rationing supplies in traders' minds.

Wheat: 4 to 6 cents lower. Futures were weaker on spillover from neighboring pits, as the market is in a follower's role. Wheat came well off session lows yesterday as corn firmed. USDA raised wheat carryover more than expected and reversed the year-to-year trend in global wheat carryover, as it's now pointed up from year-ago. Weakness in the U.S. dollar index could spur some short-covering.

Live cattle: Steady to higher. Futures are expected to see followthrough from yesterday's gains, we all as help from a strong start to the boxed beef market for the week. This week's cattle showlist is down in Nebraska and the Southern Plains, which points to further improvement in the cash cattle market. Some profit-taking, however, is possible following yesterday's firmness in futures.

Lean Hogs: Mixed. Futures were mixed yesterday, with nearbys slightly lower amid spreading. More of the same is expected this morning, although nearbys could be the leader to the upside given expectations for steady to firmer cash hog bids. Packers are in need of additional supplies and nearby futures are back in line with the cash index.

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