Grain Prices Mixed Overnight

January 8, 2013 12:12 AM

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

Corn: Mixed. Futures are seeing choppy trade overnight, with nearbys firmer. Price action is likely to remain choppy as traders prepare for Friday's key USDA reports, which include the annual crop summary and the Quarterly Grain Stocks Report. Traders look for USDA to raise carryover from last month due to dismal export demand. On that front, sources report South Korea has purchased more then 315,000 MT of optional-origin corn (all South American) since Friday to capitalize on the latest decline in price.

Soybeans: 1 to 5 cents lower. Futures are weaker, but have seen choppy trade and haven't strayed too far from unchanged since posting a high-range close and strong gains yesterday. Strong commercial buying was noted yesterday which would imply strong demand, but no fresh news has been reported. Meanwhile, drier areas of northern Brazil are expected to see rain this week, which would further improve crop prospects. Traders are also focused on evening positions ahead of Friday's key USDA reports, which are expected to show a slight increase in carryover from last month.

Wheat: 2 to 3 cents higher. Futures are enjoying light followthrough short-covering in overnight trade, with upside potential limited by a lack of fresh news and a lack of strong buying in neighboring pits. Wheat futures are due for a period of short-covering to correct the severely oversold condition of the market, but have a lot of work ahead in order to improve the bearish technical situation. Some support is also coming from expectations USDA will tighten wheat carryover slight in Friday's report, but rains in the Southern Plains this week are serving to limit buying interest.

Live cattle: Mixed. Futures are expected to be mixed as traders watch the beef market for cash clues. Beef prices started the week mixed, with Choice values down 77 cents and Select up 38 cents on strong movement of 207 loads. Cash sources say this week's showlist is higher than last week after many feedlot balked at packers' bids last week, which raises the risk of cash negotiations lasting well into the week.

Lean hogs: Mixed. Lean hog futures are expected to be mixed as traders are cautious about extending long positions given the premium nearbys hold to the cash index. Pork cutout values firmed 22 cents to start the week to improve packers' profit margins slightly. But pork movement was moderate to start the week at 58.5 loads. The cash hog market softened yesterday, which signals packers are having no difficulty securing needed supplies.


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