Grains See Light Followthrough Buying

06:36AM Nov 14, 2012
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Overnight highlights. Following are highlights of overnight trade (as of 6:35 a.m. CT) and opening livestock calls:

Corn: 1 to 3 cents higher. Futures are benefiting from followthrough from yesterday's gains, as well as light pressure on the U.S. dollar index. Buying is technical in nature, as there's little fresh news to digest. The Chinese government said it will continue to buy corn from the domestic market to boost state reserves. A record Chinese crop was seen this year.

Soybeans: 12 to 13 cents higher. Futures are firmer on followthrough from yesterday's gains as traders work to correct the oversold condition of the market. January beans are pivoting around $14.20, but have a lot of work ahead to improve technicals. China is paying 15% more than last year to its farmers to boost state reserves.

Wheat: 4 to 7 cents higher. Wheat is seeing a boost from neighboring pits and light weakness in the U.S. dollar index. Additional support is coming from yesterday's condition report from USDA that showed more deterioration in the crop than traders expected. December Chicago wheat futures respected support at the October low yesterday and are seeing light corrective buying this morning. Traders are getting impatient waiting on a decision by Ukraine regarding a plan to halt exports due to tight stocks.

Live cattle: Steady to firmer. Futures are expected to see a lift from improvement in the boxed beef market, as Choice values firmed 9 cents and Select was up 88 cents on strong movement of 105 loads. Given the fact this week's showlist is up from last week, traders say the best case scenario for the cash market is steady due to packers' negative profit margins.

Lean hogs: Lower. Futures are expected to be pressured by tightening profit margins, as pork cutout values slipped $1.61 yesterday. This raises concerns about demand, as traders are fearful values will continue to soften as pork tries to compete with poultry. The cash hog market is called lower today as packers say they are having no difficulty securing needed supplies.