Grains See Light Profit-Taking Overnight

August 24, 2011 02:04 AM

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

Corn: 1 to 2 cents lower. Futures saw light profit-taking following yesterday's strong gains, with downside risk limited by concerns about the U.S. crop. Traders are noting the disappointing yield reports from the Pro Farmer Midwest Crop Tour in Indiana and will be watching to see what scouts find in western Iowa and Illinois today. Bulls still definitely have the near-term advantage.

Soybeans: 1 to 2 cents lower. Futures saw light profit-taking overnight following yesterday's gains. November beans are knocking on the door of $14.00. A close above this level would have bulls targeting the spring highs. The U.S. dollar index is weaker this morning. As a result, traders could view the overnight decline as a buying opportunity.

Wheat: 3 to 8 cents lower. After leading gains yesterday, wheat futures led losses overnight. Still, losses were limited by weakness in the U.S. Dollar index. Concerns about the U.S. spring wheat crop and now rains in parts of Germany are hampering harvest efforts and causing quality concerns. This too will limit pressure as traders return this morning.

Live cattle: Weaker. Futures are expected to be weaker this morning as traders growing less optimistic about steady to firmer cash cattle trade in light of this week's higher showlist and lackluster boxed beef trade. Futures are also expected to see spillover from the U.S. stock market, which is returning its focus to the struggling global economy.

Lean hogs: Weaker. Futures are expected to see some spillover pressure from the U.S. Stock market as well as from the cash hog market. Cash bids are expected to be steady to weaker again this morning as packers have supplied booked well into the week. However, with nearby futures still trading at a steep discount to the cash index, downside risk should be limited.


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