Grains on Pace to Post Slight Weekly Gains

December 2, 2011 12:10 AM

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

Corn: Steady to 1 cent higher. Futures continued within the bounds of this week's trading range overnight, as the market continues to hold in a fairly narrow range. March corn, however, is set to post slight weekly gains, which would be the first step in putting in a near-term low. There's little fresh news for the market to digest this morning, but the monthly jobs report at 7:30 a.m. CT is likely to set the tone for the open.

Soybeans: 5 to 6 cents higher. Similar to corn, soybean futures have seen a week of consolidation, with January beans set to post slight weekly gains. The contract needs a close above downtrending resistance drawn off October reaction highs to signal a near-term low is in the works. The U.S. dollar index is slightly weaker this morning, but crude oil and gold firmer.

Wheat: Mixed. Wheat futures were the upside price leader yesterday by posting the strongest close thanks to concerns about a tight supply of spring wheat. A weaker U.S. Dollar has also been supportive for wheat futures, although export demand hasn't been impressive (although is keeping on pace with USDA's forecast). March Chicago wheat is working on slight weekly gains, which would be the first step in putting in a near-term low.

Live cattle: Steady to firmer. Light cash cash cattle trade at higher levels was reported in Nebraska, although bids and asking prices remained several dollars apart in Kansas and Texas. Strength in futures sets the stage for higher cash cattle trade in the Southern Plains, although packers are struggling after cutting in the red for quite some time. A storm forecast for the Plains is also supportive for futures and the cash market.

Lean Hogs: Steady to firmer. Futures are expected to be firmer this morning on help from improvement in the pork cutout market. After posting a $2-plus loss the previous day, pork cutout values improved $1.09 yesterday to lift traders' spirits and push packers' profit margins further in the black. The cash market is expected to be mostly steady today as they have plenty of supplies to draw from. In fact, weekly pork production is set to out-produce beef production for the first time in three years this week. .


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