Grains Face Stepped Up Profit-Taking Overnight

September 26, 2012 01:40 AM

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Overnight highlights. Following are highlights of overnight trade (as of 6:40 a.m. CT) and opening livestock calls:

Corn: 6 to 9 cents lower. Futures continued their bleed lower overnight as traders have little fresh news to factor into the market. As a result, they have turned their focus to evening positions ahead of Friday's Quarterly Grain Stocks Report. The report is expected to reflect the influx of new-crop corn to boost 2011-12 carryover above USDA's current peg. As a result, traders don't want to be caught on the wrong side of the market.

Soybeans: 17 to 23 cents lower. Futures are under pressure as traders turn their focus to evening positions ahead of Friday's Quarterly Grain Stocks Report, as well as the influx of new-crop supplies onto the market. While supplies will remain tight until South America begins its harvest next year, rains across newly planted fields in Mato Grosso are adding pressure to soybean futures this morning.

Wheat: 8 to 11 cents lower. Futures are seeing spillover from neighboring pits, as well as strength in the U.S. dollar index this morning. Rains in areas of Australia and forecasts for widespread rains across the U.S. Southern Plains are relieving concerns about tightening global supplies. Traders are also preparing for Friday's Small Grains Summary, which is expected to reflect a slightly larger crop than USDA current predicts.

Live cattle: Steady to firmer. Futures are expected to see some short-covering following yesterday's sharp losses. But yesterday's decline spurred talk that feedlots will have to back down to packers' offers of much lower bids this week. Cash trade is expected to drag on well into the week. Meanwhile, Choice beef values stabilized at just 1 cent lower yesterday and Select declined 87 cents on strong movement of 209 loads.

Lean hogs: Steady to firmer. Futures are expected to see some light support from expectations for steady to firmer cash hog trade. Pork cutout values were 46 cents firmer yesterday on very strong movement of 116.08 loads. But packers have seen profit margins tighten considerably. While still in the black, packer demand for hogs could tighten if pork prices soften.


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