Grains See Light Short-Covering Overnight

September 16, 2011 08:52 AM

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

Corn: 3 to 4 cents higher. Futures were stronger overnight amid short-covering. December corn posted a convincing close below the June high of $7.22 3/4 yesterday to do some short-term technical chart damage. This came despite weekly corn export sales in excess of 1 million metric tons and weakness in the U.S. dollar index. There is also talk China is sniffing around for U.S. corn on the price break. This morning, the dollar is stronger again, which tempered buying.

Soybeans: 5 to 7 cents higher. Futures enjoyed light short-covering overnight following yesterday's sharp losses to do more near-term technical chart damage. Traders have been focused on shredding risk after USDA raised the size of the soybean crop in its September Crop Production Report. A poor showing in the weekly export sales report added to weakness yesterday.

Wheat: 5 to 6 cents higher. Futures saw light short-covering overnight, as well as spillover from neighboring pits. Wheat is in a follower's role, watching moves in the corn market closely. December Chicago wheat is hovering just above support at the August low of $6.81 3/4. Violation of that support would open the door for a move to the July low of $6.39.

Live cattle: Mixed. Futures are called mixed after yesterday's sharp sell off, which spurred some light cash cattle trade. In the Southern Plains, at least one feedlot moved cattle at steady prices with the top end of last week's range at $118. Pressure on live cattle futures forced some feedlots to move cattle, while other are holding out for $119 to $120.

Lean Hogs: Mixed. Futures are called mixed amid spreading, as well as position evening ahead of the weekend. Pork cutout values slipped 50 cents yesterday to tighten packers' profit margins. But with packers still working on securing supplies for early next week, cash bids are expected to be steady to $1 higher again this morning.


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