Grains Maintain This Week's Choppy Trading Range

September 9, 2011 01:36 AM

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Overnight highlights.

Following are highlights of overnight trade and opening calls:

Corn: Marginally to 2 cents higher. To maintain this week's choppy trading range, corn was firmer overnight. Strength in the U.S. dollar index limited buying, although traders don't want to push corn too far to the downside ahead of Monday's Crop Production Report. Traders fully expect USDA to lower the size of the crop, but have a sizable yield drop already priced in.

Soybeans: 5 to 7 cents higher. Futures benefited from short-covering overnight to maintain this week's choppy range. Strength in the dollar limited buying, although focus in the market today will also be on position squaring ahead of Monday's Crop Production Report. Like corn, traders expect USDA to trim the size of the crop due to declining crop condition ratings, but have a yield drop already factored into prices.

Wheat: Mixed. Futures have been in a follower's role this week, but upside potential from slight strength in corn overnight was limited by dollar strength. Since U.S. wheat is not priced competitively on the global market, further dollar improvement raises concerns about how long lasting slowed wheat demand will be.

Live cattle: Steady to higher. Futures are expected to be higher this morning in reaction to the start of cash cattle trade at higher levels in Nebraska. Live cattle have posted technical improvement this week to signal a near-term low has been posted, which could help secure a high-range finish for the week. But with the U.S. stock market expected to be weaker, buying could be limited.

Lean Hogs: Steady to higher. Followthrough buying in lean hog futures today and a high-range close would signal a near-term low has been posted. Traders have brought nearby hogs back in line with the cash index and cash bids were mostly steady yesterday and could possibly firm today as packers say they still need to secure next week's needs.

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