Grains Softer Overnight on Profit-Taking

January 18, 2012 12:43 AM

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

Corn: 2 to 4 cents lower. Futures closed slightly higher yesterday, but near session lows. The inability of corn to see spillover from yesterday's strong gains in the bean pit signals traders still has last week's bearish USDA reports on their minds. The U.S. dollar index was weaker overnight, but corn softened, with the March contract pivoting around $6.00. Fresh demand news is needed to help the market find a floor of support.

Soybeans: 2 to 10 cents lower. Futures erased about half of yesterday's gains overnight amid profit-taking. Futures were supported yesterday by positive outside markets and concerns about the South American bean crop, but focus has returned to the struggling euro-zone.

Wheat: 3 to 6 cents lower. Futures were pressured by spillover from neighboring pits overnight, although dollar weakness limited pressure. Traders are taking a more cautious approach to the market after commodity markets were generally higher yesterday. Whenever news is light for the commodity markets, focus returns to the ongoing debt struggle in the euro-zone.

Live cattle: Mixed. Futures are expected to see a mixed start due to uncertainty about this week's cash market. Futures had some catching up to do to last week's cash trade to start the week, but softer boxed beef values mean packers will not be eager to raise bids again this week. Choice beef values slipped 81 cents yesterday and Select was down 95 cents. Showlists are steady to slightly tighter this week. As a result, look for cash trade to be delayed until later in the week.

Lean Hogs: Mixed. Futures are expected to be mixed, with buying limited by softer cash hog bids. However, traders are hopeful the cash market is nearing a low due to recent improvement in the pork cutout market. Pork cutout values were 48 cents firmer yesterday, but further gains are needed to lift packers' profit margins out of the red.


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