Grains Start Holiday Week Under Pressure

November 21, 2011 12:25 AM

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

Corn: 5 to 8 cents lower. Futures are seeing pressure from strength in the U.S. dollar index. Rising concerns over the global economy, particularly the euro-zone  where bond yields are on the rise, lifted the U.S. dollar index. December corn is hovering above $6.00 -- an important psychological level. Given the "risk-off" stance heading into Thanksgiving, a move through that level could trigger sell stops.

Soybeans: 10 to 12 cents lower. Futures were weaker overnight on negative outside markets and growing concern euro-zone economic troubles could spread. The U.S. stock market is set for a lower start as the Super Committee is likely to announce later today it has failed to come to an agreement on U.S. debt-reduction talks. Without fresh positive demand news, soybeans appear headed for a fresh monthly low.

Wheat: 5 to 7 cents lower. Futures were weaker overnight on spillover from neighboring pits and negative outside markets. In its latest tender, Egypt over the weekend announced it has purchased 240,000 metric tons of Russian, Ukrainian or Kazakh wheat, reminding the market U.S. wheat is not combatively priced.

Live cattle: Mixed. Futures are called to open mixed, with pressure limited by Friday's positive Cattle on Feed Report. Negative outside markets are expected to limit bullishness. The report showed On Feed and Placements about as expected, with a more aggressive Marketings pace providing the positive look at this report. However, the U.S. stock market is set to open lower, which could lessen bulls' effectiveness.

Lean Hogs: Mixed. Futures are expected to be mixed this morning on spillover from negative outside markets and economic concerns vs. ideas a seasonal low is in. Additional pressure is expected from the cash market, which is called steady to $1 lower as packers say they are having no difficulty securing this week's needs. However, pressure should be limited by Friday's higher pork cutout values, which provides more signals a seasonal low has been struck.


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