Grains Lower Overnight Amid Profit-Taking

July 6, 2012 01:15 AM

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Overnight highlights. Following are highlights of overnight trade (as of 6:15 a.m. CT) and opening livestock calls:

Corn: 15 to 19  cents lower. Futures are lower amid profit-taking this morning given the highly overbought condition after yesterday's gains. December corn so far has remained within the boundaries of yesterday's trading range to suggest that current losses are corrective in nature. This morning's monthly jobs report will also influence investor risk appetite.

Soybeans: 12 to 17 cents lower. Futures are seeing profit-taking following yesterday's sharp gains, with contracts remaining within the bounds of yesterday's trading range. If futures fill in yesterday's gap area, it would suggest more near-term price pressure is ahead. Traders remain concerned about the weather, but a market top could come as media coverage about the Midwest drought gains momentum.

Wheat: 20-plus cents lower. Futures are seeing profit-taking on spillover from neighboring pits. Chicago wheat are mostly around 22 cents lower, with the September contract briefly dipping into yesterday's gap area. While wheat traders remain concerned about global crop conditions, recent gains have come on the back of the corn market.

Live cattle: Mixed. Futures are called mixed as traders wait on cash trade to begin. Most are expecting cash to come in steady with last week's $116 trade. Choice beef values were 35 cents firmer yesterday and Select declined $1.52 to widen the Choice/Select spread. This signals packers are in need of more finished animals. Movement of 226 loads also signals holiday beef clearance was good.

Lean Hogs: Steady to lower. Futures are expected to be weaker this morning as traders react to weakness in the cash market. Pork cutout values slipped 92 cents yesterday to push packers' profit margins deeper into the red. As a result, demand for cash hog has softened and bids are expected to be steady to weaker this morning. Downside risk could be limited by short-covering.


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