Grains Choppy Overnight Amid Lackluster Trade

October 11, 2011 01:40 AM


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

Corn: 1 to 4 cents lower. Futures started the overnight session firmer, but softened, with December pivoting around $6.00. The U.S. dollar index was stronger overnight after falling sharply yesterday. Today, Slovakia will vote on whether or not the euro-zone should expand the European Financial Stability Fund. Traders will be focused on evening positions ahead of tomorrow morning's USDA reports. Traders look for USDA to trim the size of the corn crop slightly, but for carryover to rise due to a boost in carryin stocks.

Soybeans: 10 to 13 cents higher. Futures added to yesterday's strength, with futures returning to near the top end of yesterday's trading range in overnight trade. Short-covering is helping to lift the market, as well as firming country basis levels as the bulk of harvest-related hedge pressure has passed. Traders will also be focused on evening positions ahead of tomorrow morning's USDA report, which could limit buying in the market. The report is expected to show a slight uptick in the size of the crop and carryover.

Wheat: 1 to 2 cents higher. Futures favored a firmer tone in lackluster trade overnight. Despite strength in the U.S. Dollar index, wheat futures benefited from light short-covering. Wheat remains in a follower's role given the lack of fresh news. Price action could easily be choppy today as traders even positions ahead of tomorrow's USDA reports, expected to show around a 14-million-bu. drop in carryover from last month following a smaller crop in the Small Grains Summary.

Live cattle: Mixed. Futures are expected to see another choppy day amid spreading as traders wait on the start of cash cattle trade. This week's showlist is expected to be steady to slightly higher than last week after some cattle were carried forward. The boxed beef market started the week seeing mixed price action, with Choice up 49 cents and Select down 11 cents. Strong movement of 211 loads signals demand remains strong.

Lean Hogs: Mixed. Futures are expected to be mixed today as traders keep a close eye on the cash market. Cash bids are expected to soften in some locations as packers work to improve tight profit margins. Traders also look for supplies to become more abundant, trimming demand for cash supplies near-term.


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