Grains Softer Oernight Ahead of Key Jobs Data

October 7, 2011 01:48 AM


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

Corn: 6 to 9 cents lower. Futures saw followthrough from yesterday's dismal close. After some "signs of life" earlier this week, signaling a near-term low was in the works, price action has turned choppy. Traders aren't anxious to add risk quite yet. The euro-zone situation, while improved, still remains concerning. The bright light has been demand, as prices have fallen to levels that have end users buying once again.

Soybeans: 7 to 8 cents lower. Futures were weaker overnight despite weakness in the U.S.dollar index. Traders simply aren't ready to add risk given ongoing harvest progress. November beans are testing support at this week's low of $11.52 this morning. Yesterday's export sales report showed weekly bean sales at the top end of expectations, which signals value has returned to the market.

Wheat: 7 to 8 cents lower. Wheat is in a follower's role, seeing spillover from neighboring pits. Chicago and Kansas City futures were pressured yesterday by forecasts for widespread rains in the Southern Plains this weekend, while nearby Minneapolis was bolstered by spring wheat crop concerns. The U.S.dollar index is weaker this morning, but traders are taking a cautious approach to the market ahead of this morning's key jobs data.

Live cattle: Mixed. Futures are called mixed as traders wait on additional cash cattle trade, as this week's showlist hasn't completely cleaned up. Packers, who are in need of additional supplies, don't want to bid up given negative profit margins. This morning's open in the livestock markets will also be directed by the stock market, as it anticipated the 7:30 CT release of the monthly jobs report.

Lean Hogs Mixed. Futures are called mixed, but pressure will be limited to profit-taking given ongoing cash strength. Packers have seen profit margins tighten this week, but demand for hogs is still strong as they compete with an active Midwest harvest pace. Pork cutout values slipped 22 cents yesterday to further tighten margins. Cash hog bids are called steady to $1 higher this morning.


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