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Overnight highlights. Following are highlights of overnight trade (as of 6:20 a.m. CT) and opening livestock calls:
Corn: 4 to 7 cents higher. Futures are enjoying a short-covering bounce on ideas yesterday's losses were overdone. But buying is limited and the U.S. dollar index is firmer. Without fresh news, it will be difficult for corn to continue this morning's rally into daytime trade. December corn respected support at the September low of $7.05 yesterday. Violation of this support would open significant near-term downside risk. This morning, the contract is pivoting around $7.25.
Soybeans: 9 to 10 cents higher. Futures are seeing support from ideas yesterday's losses were overdone. January beans hit sell stops and tested the $14.00 level, although remained above it. Violation of this support would open at least another 50 cents of downside risk. There's little fresh news for the market to digest this morning and traders remain focused on improved weather in South America.
Wheat: 4 to 6 cents higher. Wheat is firmer this morning on spillover from neighboring pits and short-covering, but upside potential is being limited by strength in the U.S. dollar index. Wheat avoided doing any technical chart damage yesterday, but if soybean futures extend their decline, it will be difficult for wheat to hold its own. Traders expect this afternoon's crop condition report to reflect continued deterioration in the crop.
Live cattle: Steady to firmer. Futures are expected to see a lift from a solid start to the week in the beef market. Choice values rose $1.43 and Select was up 15 cents on strong movement of 157 loads. While packers' profit margins remain in the red, ideas the beef market is working on a low should help to firm futures. But negative outside markets will limit buying, as the U.S. stock market is expected to be weaker this morning due to fiscal cliff concerns.
Lean hogs: Mixed. Futures are expected to be choppy today, with pressure on nearbys limited by the discount they hold to the cash index. However, yesterday's 90-cent drop in pork cutout values has traders looking for steady to weaker cash hog bids again today as packers work to keep profit margins in the black. Packers are having no difficulty securing needed supplies.