Grain Markets Firm Following Two-Day Plunge

April 2, 2013 01:23 AM

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Overnight highlights. Following are opening grain and livestock calls at 6:22 a.m. CT:

Corn: 1 to 6 cents higher. Following a two-day 90-plus cent decline, May corn futures are firmer this morning amid short-covering. Traders are also responding to indications Asian feed buyers are increasing their purchases. But with severe technical chart damage done, bulls aren't likely to come in and actively rebuild long positions immediately. New-crop futures are also firmer this morning after bouncing off downtrending support drawn off November and February lows yesterday.

Soybeans: 6 to 11 cents higher. Following a two-day 60-plus cent decline in May soybean futures, the contract is benefiting from short-covering this morning and pivoting around $14.00. While the contract has violated support at the March low, no major technical damage will be done unless the contract plunges below the January low of $13.44. There is also some chatter this morning about China's supplies tightening due to port congestion in Brazil, which could result in some "fill-in" purchases from the U.S. until Brazilian supplies begin to flow more regularly.

Wheat: 6 to 12 cents higher. Following a two-day 70-plus cent decline in May Chicago wheat futures, the contract is seeing light spillover from neighboring pits and short-covering on ideas the downside has been overdone -- at least for now. But wheat futures need a dose of fresh export news to encourage traders to rebuild long positions. The first official crop condition ratings of the season were also a disappointment -- coming in well below year-ago levels. Click here for the Pro Farmer Crop Condition Index.

Live cattle: Mixed. Cattle futures are expected to be mixed today as traders are getting signs that retailers have begun to buy for grilling features. Choice beef values improved $1.48 yesterday, but Selected declined 7 cents. Movement of 143 loads is decent for the week, but traders will want to see this improve in order to suggest the cash market can build on last week's improvement, especially with this week's showlist up from last week.

Lean hogs: Mixed. Lean hog futures favored a firmer tone yesterday despite the bearish Hogs & Pigs Report. But with nearby lean hog futures trading at a premium to the cash index and packers' profit margins barely in the black, it could be difficult for futures to build on yesterday's gains. Pork cutout values improved 75 cents yesterday, but only 9.25 loads changed hands to keep demand concerns on traders' minds.


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