Grains Choppy Overnight, Prepare For Reports

September 29, 2011 04:16 AM

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

Corn: Mixed. Futures were choppy overnight, with nearbys favoring a slightly weaker tone as of late. The big news overnight that helped to firm the market is a key vote from Germany's parliament, which became the latest of the 17 countries in the euro-zone to approve an overhaul of the European Financial Stability Facility. So far, nine countries have approved it. Traders will also be putting their finishing touches on positions ahead of tomorrow morning's key Quarterly Grain Stocks Report.

Soybeans: 2 to 4 cents lower. Futures favored a weaker tone overnight, but were well off session lows on news of Germany's vote. Still, more technical chart damage was done overnight as November beans slipped below the $12.10 level early, making $12.00 bears' next target. Traders are also focused on harvest progress, which is ramping up across the Corn Belt. Traders will be putting their finishing touches on positions ahead of tomorrow morning's Grain Stocks Report, which will set 2010-11 carryover.

Wheat: 1 to 3 cents higher. Futures saw two-sided trade overnight, but were firmer in late trade amid dollar weakness. The dollar softened on news of Germany's vote, which is expected to lift the U.S. stock market this morning. Wheat, however, has a lot of work to do to signal a near-term low has been posted, as futures hover above last week's low. December Chicago wheat is pivoting around $6.40.

Live cattle: Mixed. Futures are expected to be mixed as traders wait on cash trade to begin. Given strength in futures so far this week (despite yesterday's choppy close), expectations are for $1 to $2 higher trade amid tighter market-ready supplies. Cattle should see a boost from the U.S. stock market, which is expected to react positively to Germany's vote.

Lean Hogs: Steady to weaker. Futures are expected to be pressured this morning by yesterday's Quarterly Hogs & Pigs Report, which showed slight expansion in the hog herd. The report showed All Hogs & Pigs about as expected at 101% of year-ago levels, but the Kept for Breeding category at 101% of year-ago signals herd expansion, coming in above expectations which were nearly even with year-ago. Despite a very hot summer, the pigs per litter number remained high at 102% of year-ago. Yesterday's report makes hog weights even more important. Current dressed weights trending below year-ago need to continue in order to keep supplies manageable.


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