Grain Markets Weaken on Followthrough Pressure

January 3, 2013 12:43 AM
 

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Overnight highlights. Following are opening grain and livestock calls at 6:45 a.m. CT:

Corn: 4 to 7 cents lower. Futures are seeing followthrough from yesterday's losses to weaken the near-term technical outlook. March corn has violated support at the December low of $6.87 1/2. A close below this level and filling the early July gap area at $6.83 1/2 would open fresh downside risk Adding to weaken this morning are negative outside markets.

Soybeans: 11 to 15 cents lower. Futures are seeing followthrough from yesterday's losses as well as from negative outside markets. Additional pressure is coming from news of new-crop soybeans in Brazil hitting the market. Followthrough pressure following a bearish reversal is a sign of more near-term pressure to come, but even more key is how the market responds to support at the December lows. That support lies at $13.72 1/4 for the January contract.

Wheat: Mixed. Chicago wheat is 3 to 4 cents lower on spillover from neighboring pits, with Kansas City mixed and Minneapolis mostly 4 to 6 cents higher. Chicago wheat is largely influenced by spillover from neighboring pits, but other markets are seeing some light short-covering. But without fresh news for the market to digest, it will be difficult for contracts to rally.

Live cattle: Mixed. Live cattle are called mixed as traders wait for cash trade to develop. Beef prices were mixed yesterday, with Choice down 21 cents and Select up $1.57 on decent movement of 148 loads. Expectations are for steady to firmer cash cattle compared to last week's $127 trade, although no active bidding has been reported.

Lean hogs: Weaker. Futures are expected to be weaker this morning due to concerns about the pork market. Pork cutout values slipped a dollar yesterday due push packers' profit margins further into the red. As a result, traders could opt to narrow the premium nearby futures hold to the cash market.


 

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