Grains Improve on Short-Covering

October 24, 2012 01:33 AM

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Overnight highlights. Following are highlights of overnight trade (as of 6:35 a.m. CT) and opening livestock calls:

Corn: Marginally to 2 cents higher. Futures are seeing light spillover from yesterday's turnaround and spillover from strength in the soybean pit this morning. Otherwise there's little fresh news for the market to digest. Outside markets are not supportive of commodity buying this morning, although the U.S. stock market is poised to recover a portion of yesterday's sharp losses.

Soybeans: 8 to 10 cents higher. Futures are stronger this morning on followthrough from yesterday's late-session recovery. Futures are also seeing some support from indications China's economy is stabilizing as its flash PMI rose over month-ago. According to official Chinese customs data, the country's imports in September of 4.97 MMT were up 20% from a year earlier and for the first nine months of the year imports of 44.3 MMT were up 18%. With no slowdown in sight, traders need to find a price that rations demand.

Wheat: 2 to 5 cents higher. Chicago wheat is mostly 2 to 5 cents higher, but Kansas City and Minneapolis futures are mixed. Buying is being limited by slight strength in the U.S. dollar index, as crude oil and gold are weaker. But ongoing concerns about dryness in Australia and the need for more rains in the U.S. Southern Plains are keeping crop concerns on traders' minds.

Live cattle: Mixed. Futures are expected to be mixed as traders wait on cash cattle trade to begin. Packers are expected to offer bids today and feedlots will pass until they are $2 to $3 higher than last week's $127 trade. Choice beef values are within $1.48 of the $200-per-cwt. level, and yet packers' profit margins are still in the red.

Lean hogs: Steady to lower. Futures are expected to be lower this morning in reaction to yesterday's $1.23 drop in pork cutout values. Although movement improved at 100 loads, packers' saw profit margins tighten and are expected to begin lowering bids. This, combined with a bearish Cold Storage Report could put in a seasonal high.


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