Grain Market Choppy Overnight

February 5, 2013 12:32 AM

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Overnight highlights. Following are opening grain and livestock calls at 6:30 a.m. CT:

Corn: 1 to 2 cents lower. Futures were unable to hold yesterday's early gains and are seeing light followthrough pressure this morning. Corn futures are not benefiting from weather concerns in South America, as the bulk of the concern is on the filling soybean crop. But hot and dry conditions in southern Brazil and Argentina are hurting the filling corn crop, which is helping to limit pressure on corn to profit-taking.

Soybeans: 1 to 3 cents higher. Futures are seeing light followthrough buying from yesterday's gains as crop estimates out of South America seem to have topped -- at least for now due to weather concerns. Too much rain in northern Brazil is raising crop quality concerns and delaying harvest, while hot and dry conditions in southern Brazil and Argentina are stressing the crop during its critical pod fill time. Futures moved to a new-for-the-move high yesterday to improve the near-term technical outlook.

Wheat: Marginally to 1 cent lower. Wheat are marginally lower this morning on spillover from corn, as well as a lack of fresh news. Wheat softened throughout the day as traders realize demand for U.S. wheat remains lackluster, although strong enough to reach USDA's export projection.

Live cattle: Mixed. Futures were stronger in all but the front-month contract yesterday in reaction to the Cattle Inventory Report that reflected a tightening supply situation. But traders are now watching to see if the beef market can work higher in order to improve packers' profit margins. Beef values have softened sharply the past two weeks and firmed only slightly yesterday, although movement has improved to signal prices have once again found "value" buying.

Lean hogs: Steady to weaker. Futures are expected to see followthrough from yesterday's losses due to weakness in the pork market. Pork values slipped $1.03 yesterday to keep packers' profit margins deep in the red. As a result, the cash market is called steady to weaker. February lean hog futures are trading in line with the cash index, which should limit the contract's price move today.


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