Grains Soften Overnight

September 28, 2011 03:41 AM

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

Corn: 5 to 7 cents lower. Futures saw some profit-taking overnight following yesterday's move off session highs into the close. While the U.S. dollar index was weaker overnight, commodity markets didn't follow as traders remain cautious about the global economy. There is more optimism about the euro-zone situation, but it's far from settled. Traders are also beginning to more actively even positions ahead of Friday's key Grain Stocks Report, which will set carryover for 2010-11. The average trade guess is at 962 million bushels.

Soybeans: 4 to 8 cents lower. Futures were weaker overnight following yesterday's low-range close. Weakness in the U.S. dollar index did little to attract buying to commodity markets overnight as traders continue to shed risky investments. Traders are turning their attention to yield reports and positioning ahead of Friday's key Grain Stocks Report. The report is expected to set 2010-11 carryover at 225 million bushels.

Wheat: 3 to 6 cents lower. Futures were lower overnight on spillover from neighboring pits. Wheat posted a mid-range close yesterday and Chicago December wheat is pivoting around support at yesterday's low overnight. Without widespread buying, wheat will struggle to move higher, although traders recognize conditions are too dry to establish a crop in the Southern Plains. Traders are also beginning to prepare for the Grain Stocks and Small Grains Reports. Traders look for USDA to trim the size of the wheat crop slightly to 2.046 billion bushels.

Live cattle: Mixed. Futures are expected to be mixed on some profit-taking, as well as weakness in the boxed beef market this week. Traders still expect steady to firmer cash cattle trade this week due to tighter market-ready supplies, but will be watching to see if the beef market stabilizes.

Lean Hogs: Mixed. Futures are called mixed amid spreading, with upside potential limited by softness in the pork cutout market. Packers are expected to offer steady to lower bids today in order to keep profit margins well in the black. The U.S. stock market is expected to be firmer today, which is also supportive for livestock futures this morning. Price action could be choppy ahead of this afternoon's Hogs & Pigs Report, expected to show a slight increase in All Hogs & Pigs due to efficiencies via pig per litter.


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