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Overnight highlights. Following are highlights as of 7:35 a.m. CT and opening livestock calls:
Corn: 1 to 6 cents higher. Futures are enjoying a corrective bounce this morning on ideas recent losses were overdone, although volume has been light. Yesterday's weekly export sales showed an improvement in export demand, although demand remains lackluster. Traders, however, are keeping a close eye on Gulf corn basis which has upticked recently, as this could be a signal corn has found "value." Corn futures have a lot of ground to make up in order to return control to market bulls.
Soybeans: 3 to 7 cents higher. Futures are enjoying a corrective bounce this morning on ideas recent losses were overdone. But overall, soybean futures are still working on weekly losses after Monday's gap-lower start. Due to the extended holiday weekend (markets closed Monday for President's Day), traders are likely to trim their short exposure to the market. But limiting buying in the bean pit will be improvements in the weather in South America this week, as southern Brazil and areas of Argentina have seen shows to aid the filling crops.
Wheat: 5 to 7 cents higher. Wheat is seeing spillover from neighboring pits as well as short-covering on ideas recent losses were overdone. Additional support is coming from news Brazil purchased 100,000 MT of U.S. HRW wheat and Japan purchased 61,568 MT of U.S. wheat. These purchases could signal U.S. Wheat is once again becoming competitive on the global market, but more buying is needed to aid in a price recovery in the wheat pit.
Live cattle: Mixed. Futures are expected to see a choppy start as the market is due for a corrective bounce, but traders are concerned about demand. The boxed beef market has put in a dismal performance this week and traders remain concerned about the possibility of meat inspectors being temporarily furloughed, which would halt exports. As a result, traders will remain cautious. This week's cash cattle trade was largely completed at $123, which is down $2 from last week.
Lean Hogs: Mixed. Futures are expected to see a choppy start, but upside potential will be limited to short-covering given concerns about demand and the possibility of meat inspectors being furloughed beginning March 1. Pork cutout values improved 14 cents yesterday, but packers' profit margins remain well in the red, which raises concerns about demand for hogs. Traders expect weakness in the cash hog market to linger into next week.