Grains Mixed as Traders Even Positions

October 26, 2012 02:25 AM

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Overnight highlights. Following are highlights as of 7:25 a.m. CT and opening livestock calls:

Corn: Marginally to 1 cent higher. Futures have firmed to move into positive territory, didn't strayed too far from unchanged yet in overnight trade. Futures are working on losses for the week, but haven't done any technical chart damage as futures remain within the boundaries of the month-long consolidation range. A lack of fresh news is keeping buying to a minimum.

Soybeans: 4 to 7 cents lower. Futures are seeing weakness from strength in the U.S. dollar index, which is promoting a risk-off atmosphere. Soybeans are working on gains for the week, but need followthrough buying to post a high-range close for the week that is needed to signal a near-term low has been posted. Tight supplies are being offset by expectations for a record crop in South America. Dry areas of South America are in line for some much-needed rains this weekend.

Wheat: Mixed. Wheat is being pulled between weakness in the soybean market and light short-covering from the corn market. Nearby futures at all three exchanges are firmer, but buying is limited by a lack of fresh news. The lack of rain in the forecast for the Central and Southern U.S. Plains is supportive for nearby futures, as are dry conditions in areas of Australia and the Black Sea region. But strength in the U.S. dollar index is limiting buying.

Live cattle: Steady to weaker. Live cattle futures softened yesterday on news of steady to weaker cash cattle trade despite overall strength in the boxed beef market. Cash trade at $126.50 to $127 is a disappointment as traders had anticipated $1 to $2 higher trade. Also raising concern are yesterday's softer boxed beef values. While Choice dropped just 1 cent, Select was down $1.37 on moderate movement of 151 loads. Traders believe beef values are at levels that will be met with consumer resistance.

Lean Hogs: Mixed. Futures are expected to be mixed as traders even positions ahead of the weekend. Upside potential will be limited by concerns about the cash hog market, as demand for hogs has softened and supplies are plentiful. Pork values improved 25 cents yesterday, but are down for the week. Packers' profit margins improved yesterday, but still aren't strong enough to improve demand for cash hogs.


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