Grain Markets Weaker Overnight

August 25, 2011 02:10 AM

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Overnight highlights. Following are highlights of overnight trade and opening calls:

Corn: 4 to 5 cents lower. Futures saw spillover pressure from weakness in gold futures overnight, as it inspired some profit-taking pressure. But corn (and all grain futures) have shown resilience to wild price moves in key markets like gold and stocks. Traders remain concerned about the size of the corn crop, especially since the Pro Farmer Midwest Crop Tour is finding holes in the crop on a year that a large crop is needed to keep up with demand.

Soybeans: 4 to 6 cents lower. Futures were weaker overnight amid profit-taking pressure and spillover from gold, as well as a choppy dollar index. Crude oil futures are firmer this morning, which helped to limit pressure on soybeans. Traders remain concerned about the size of the crop, especially since dry conditions are taking a toll on areas of the Corn Belt -- especially in the southern Belt.

Wheat: 3 to 6 cents lower. Futures were weaker overnight on spillover from neighboring pits and a lack of fresh news. Sharp weakness in gold indicates investors are more willing to take on other risky investments, which is positive for other commodity markets. But until things "settle" down, grain trade is likely to remain volatile.

Live cattle: Weaker. Futures are called lower in reaction to yesterday's lower cash cattle trade, as well as spillover from the U.S. stock market. Packers had the upper hand in this week's cash negotiations due to a larger showlist. Pressure should be limited by overall tight supplies. Traders will also be monitoring the weekly export sales data for demand.

Lean hogs: Weaker. Futures are expected to be weaker by ongoing cash concerns. But pressure should be limited as nearbys still hold a sizable discount to the cash index. Not much has changed as the week progresses -- calls are for steady to weaker lower cash hog bids again this morning amid plentiful supplies. Additionally, pork cutout values slipped $1.53 yesterday to trim packers' profit margins, raising concern about demand.


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