Grain Markets Sharply Higher Overnight

January 14, 2013 12:13 AM

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Overnight highlights. Following are opening grain and livestock calls at 6:15 a.m. CT:

Corn: 2 to 14 cent higher. Nearby corn futures are leading gains this morning, with futures enjoying spillover from Friday's strong gains, as USDA's report data showed domestic demand hasn't slowed enough. USDA further tightened its carryover projection -- now to a razor-thin level. To signal a near-term low has been posted, March corn needs a close above last week's high of $7.23 3/4.

Soybeans: 11 to 15 cents higher. Futures are higher on spillover from corn, as well as concerns about a drier near-term forecast for areas of Brazil. Friday's USDA data got a mostly negative read by the market, as USDA raised the size of the crop by more than expected, grain stocks were higher than expected and USDA raised carryover. But commercials were again buyers of soybean futures overnight, which signals supplies are tightening.

Wheat: 12 to 16 cents higher. Futures are seeing a lift this morning on spillover from corn and followthrough from Friday's gains. USDA trimmed carryover more than expected, but wheat came off session highs on Friday to post a mid-range close. But this morning, wheat is back near Friday's highs. A high-range close today would signal the market is working on a near-term low.

Live cattle: Mixed. Futures are expected to be mixed, with the possibility of some short-covering following last week's losses. But there is more near-term downside risk for the market based on the $4 premium February live cattle hold to last week's $126 cash cattle trade. Traders will be watching the beef market closely for this week's cash market direction. Expectations are that feedlots did not get lots current again, which strengthens packers' bargaining power.

Lean hogs: Mixed. Futures are expected to see a choppy tone, with traders keeping a very close eye on the cash market now that February lean hog futures are trading in line with the cash index. The cash market is called steady to weaker, as packers say there are plenty of supplies to draw from. Packers saw profit margins improve last week, but they remain slightly in the red.


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