Grain Traders Focus on Global Economic Concerns

September 14, 2011 09:12 AM

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

Corn: 2 to 6 cents lower. Futures saw followthrough pressure overnight amid global economic concerns, causing traders to further lighten their long exposure to the market. Additional pressure is coming from reports of "higher-than-expected" yields coming out of the southern Corn Belt, as well as softening country basis levels. Weather will also come into play today, as freeze advisories are in effect for as far south as northern Iowa overnight.

Soybeans: 4 to 6 cents lower. Futures were weaker overnight amid followthrough pressure and concerns Greece will default on its loan obligations. Global economic concerns have been the driving force in the markets this week. A higher crop estimate from USDA on Monday started the ball rolling for market bears. Traders will also be watching for updates to the weather, as an early end of the growing season is expected overnight in the northern Corn Belt, including northern Iowa. This would nip yield potential.

Wheat: Mixed. Futures were mixed overnight, with nearbys firmer amid spreading. December Chicago wheat is trading at around a 13 cent discount to December corn, signaling it as a value buy in comparison. However, with wheat in a follower's role due to lackluster demand, upside potential will be limited unless neighboring corn and soybean markets see some short-covering.

Live cattle: Steady to higher. Futures are expected to see followthrough from yesterday's gains, although upside potential should be limited as traders wait on cash trade to begin. Strength in the boxed beef market and this week's tighter showlists has traders fully expecting $2 to $3 higher cash trade -- although bidding hasn't been active.

Lean Hogs: Mixed. Futures have been choppy this week amid spreading. Nearbys were firmer yesterday on steady to firmer cash hog bids. More of the same is expected today as packers work to secure this week's needs. Pork cutout values were firmer again yesterday to keep packers' profit margins in the double-digits.


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