Grains Lifted By Euro-Zone Hopes

October 24, 2011 01:35 AM

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

Corn: 6 to 10 cents higher. Futures were mostly 9 to 10 cents higher overnight on support from euro-zone leaders making progress toward solving its debt crisis. On Sunday, euro leaders said they were getting closer to finalizing a plan to solve its debt crisis. But given there are still no details of what the plan will be, price action could be choppy, mimicking the U.S. dollar index this morning.

Soybeans: 14 to 17 cents higher. Futures were lifted overnight by expectations euro-zone leaders would have a concrete plan in place by the Wednesday deadline to avoid a debt default. Also supporting beans overnight was a pickup in manufacturing in China in October which reflected expansion in its economy. According to Chinese customs data, bean imports from January-September were down 6% from the previous year and due to negative crushing margins, imports in September were down 11% from last year.

Wheat: 8 to 12 cents higher. Futures were lifted by expectations euro-zone leaders were moving in the right direction to avoid a debt default. A plan is expected to be announced by Wednesday, but over the weekend leaders said they were making solid progress toward that announcement. This has eased concerns among traders, but choppy price action could be seen as traders wait for more details. The U.S. Dollar index is choppy this morning, but wheat is being lifted by spillover from neighboring pits.

Live cattle: Slightly to moderately lower. Futures are called weaker in reaction to Friday's Cattle on Feed Report, which showed On Feed and Placements above expectations and Marketings just above expectations. However, general commodity buying could help to limit losses and cause traders to "fade" the report. Also, Friday's Cold Storage Report showed beef in frozen storage at the end of last month below expectations, signaling stronger-than-expected demand.

Lean Hogs: Mixed. Futures are expected to be mixed amid spreading. Upside potential is expected to be limited by Friday's Cold Storage Report, which showed pork in frozen storage above expectations, signaling pork demand hasn't been as strong as anticipated at a time when slaughter increased.


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