Grains Setback Overnight, Await Weekly Export Sales Data

January 17, 2013 01:22 AM

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Overnight highlights. Following are highlights as of 7:20 a.m. CT and opening livestock calls:

Corn: 1 to 2 cents lower. Futures are seeing light profit-taking pressure this morning as they wait on the weekly export sales data. The report is expected to reflect continued slow export demand, but more focus has been on domestic demand recently after USDA tightened carryover more than expected last week. March corn is finding resistance around the $7.30 level, as the contract has spent two days pivoting around that level and is doing so again this morning.

Soybeans: 3 to 7 cents lower. Futures are mostly 3 to 4 cents lower on light profit-taking following yesterday's strong gains. Dry conditions in Argentina and southern Brazil provided support for futures yesterday. After a wet start to the growing season, the rain has shut off -- creating a concerning situation for the crops there. But traders also recognize the Brazilian soybean crop is largely in very good shape and likely to be a record. Weekly export sales data this morning should reflect the recent uptick in Chinese purchases.

Wheat: 1 to 2 cents lower. Chicago and Kansas City futures are mostly 1 to 2 cents lower this morning, while Minneapolis is marginally to 2 cents higher. Chicago wheat is seeing spillover from neighboring pits, with pressure limited by weakness in the U.S. dollar index. But wheat needs a constant dose of fresh demand news to keep bulls interested.

Live cattle: Steady to lower. Live cattle futures are vulnerable to followthrough pressure after yesterday's losses, although some short-covering is also due as the market is working on sharp weekly losses. News of $125 cash cattle trade in Kansas and Texas late yesterday is expected to weigh on nearby futures, as February cattle are still trading at more than a $3 premium to the cash market. But ultimately, pressure should be limited by the tight supply situation.

Lean Hogs: Mixed. Lean hog futures are expected to be choppy today as traders reevaluate positions. Pork cutout values firmed 49 cents yesterday to lift packers' profit margins out of the red. But the cash market is still expected to be mostly steady today as packers say supply and demand are well balanced this week.


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