Grain Futures Face Profit-Taking on Rains

August 13, 2012 01:27 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: 5 to 9 cents lower. Futures are weaker this morning as traders take some profits out of the market due to rains moving across the Corn Belt. But pressure is being limited as traders still have Friday's tighter-than-expected 2012-13 carryover projection on their minds.

Soybeans: 8 to 12 cents lower. Soybean futures are seeing profit-taking following the weekend rain event across the Midwest which brought much-needed rain for pod-filling across a broader area of the Corn Belt than expected. But still, more rain is needed and not all fields benefited from rains. Traders still have Friday's tighter-than-expected carryover projections on their minds and realize demand is still outpacing expectations.

Wheat: 12 to 15 cents lower. Wheat is seeing spillover from neighboring pits, as wheat has ridden higher on the coattails of the corn market. Traders are also disappointed by Friday's USDA data, which revealed a larger-than-expected U.S. crop showed carryover higher than expected. Followthrough pressure from Friday's losses has September Chicago wheat testing the bottom of the consolidation range.

Live cattle: Steady to higher. Futures are expected to see a lift from strength in the beef market, as Choice values rose $2.43 and Select was up $1.02 on Friday. However, cash cattle trade was rather light last week, which means this week's showlist is higher. If cash negotiations last well into the week, it will be difficult for feedlots to get higher prices if the beef market softens.

Lean Hogs: Mixed. Futures are expected to see a mixed start, with upside potential limited by concerns about the cash market. Traders are comfortable with August lean hogs trading at around a $2 discount to the cash index as they expect the cash market to fact more near-term pressure. Pressure however, should be limited by expected strength in the cattle market.


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