Grain Markets Mostly Lower Overnight

December 19, 2012 12:27 AM

Vacation time. I am off the rest of this week, but I will be back for a Christmas Eve market update, as well as coverage all of next week.

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Overnight highlights. Following are highlights of overnight trade (as of 6:25 a.m. CT) and opening livestock calls:

Corn: Narrowly mixed. Nearby corn futures are marginally lower, but have seen choppy trade and haven't strayed too far from unchanged. Pressure is being limited by sharp weakness in the U.S. dollar index, although futures are still hovering just above important support levels, which if violated, would open fresh downside risk for futures.

Soybeans: Mixed. Futures are mixed, but are favoring a weaker tone after yesterday's low-range close. Futures were pressured sharply yesterday by news China and an unknown destination (likely China) cancelled some U.S. soybean sales, which signals they will rebook at lower prices or switch to Brazilian beans. Meanwhile, conditions are favorable for soybean development in Brazil.

Wheat: 5 to 7 cents higher. Chicago wheat is favoring a firmer tone in mixed trade, but Kansas City and Minneapolis are stronger on weakness in the U.S. dollar index. The market was due for a corrective, short-covering bounce, and traders are looking to weakness in the U.S. dollar as reason for the bounce. But without fresh news, upside potential will be limited.

Live cattle: Steady to weaker. Futures are expected to see followthrough from yesterday's losses as nearby futures are trading at a premium to last week's cash trade. While expectations are for steady to possibly firmer cash trade due to tightening market-ready supplies, packers will be hesitant to raise bids given negative cutting margins. Additionally, Choice beef values slipped 93 cents yesterday, although Select was up 51 cents and movement has been strong this week, with 225 loads changing hands yesterday.

Lean hogs: Steady to higher. Lean hog futures are expected to see a lift from improving packer profit margins as pork values improved $1.13 yesterday. Movement was also impressive at 146.25 loads, which suggests retailers are preparing for post-holiday features. The cash hog market is expected to be mostly steady today as packers work to improve margins.


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