Grain Markets Enjoy Santa Claus Rally

December 23, 2011 12:18 AM
 

Merry Christmas! The story of the birth of Jesus reminds us of the miracles God is capable of performing every day. How amazing that he brought his Son to Bethlehem to be born of a virgin and to provide the world with the kind of hope we really need. The kind of hope that keeps us going day after day, to turn our trials into celebrations. Merry Christmas and celebrate this hope. I'm off next week. See you in 2012!


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Overnight highlights. Following are highlights of overnight trade and opening calls:

Corn: 1 to 2 cents higher. Bulls have enjoyed their Christmas present this year, as a "Santa Claus" rally developed in the corn pit this week. A weekly high-range close would be a strong sign a near-term low is in the works. Stronger-than-expected weekly export sales data suggests corn is a value buy.

Soybeans: 2 to 3 cents higher. Futures were lifted overnight by dollar weakness, as well as ongoing concerns in South America and on the coattails of yesterday's stronger-than-expected weekly export sales data. Traders had "reasons" to be buyers this week and the lack of news from the euro-zone also helped to lift investor attitudes.

Wheat: 2 to 3 cents higher. Futures have enjoyed spillover from neighboring pits this week. Wheat still has a lot of work ahead to turn the reigns over to bulls, but if corn and soybeans continue higher next week, it should translate into some spillover buying.

Live cattle: Steady to higher. Bulls clearly have momentum on their side, with futures expected to build on this week's impressive price performance. The only caution is yesterday's higher-than-expected beef stocks figure from the Cold Storage Report, but focus is on tightening supplies in early 2012. Cash cattle trade got underway late yesterday at $200 to $202 on a dressed basis per cwt., up from sales of mostly at $194 last week. Strength in futures, tighter market-ready supplies and winter weather in the Southern Plains are expected to lead to higher cash trade beginning today in Texas and Kansas.

Lean Hogs: Lower. Futures are called to open lower this morning after yesterday's Cold Storage Report showed pork stocks at the end of November higher than traders expected. Traders look for today's Hogs & Pigs Report to show All Hogs & Pigs at 101.3%, Kept for Breeding at 100.8% and Kept for Marketing at 101.3% of year-ago levels. Interestingly, the report is scheduled for a noon CT release because when USDA's NASS completed their 2011 report schedule, they expected the Chicago Mercantile Exchange to close early before the Christmas weekend. But the market will be open -- which could lead to volatile trade.


 

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