Grains Weaker Ahead of Key USDA Reports

September 30, 2011 02:04 AM

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Overnight highlights. Following are highlights of overnight trade:

Corn: 3 to 5 cents lower. Futures were weaker overnight amid dollar strength. Crude oil futures are lower this morning, but gold is firmer. Early price action will be driven by this morning's Quarterly Grain Stocks Report. Traders remember the 300-million-bu. surprise the report held last year! Traders expect the report to set 2010-11 carryover at 962 million bushels. If there is no surprise, traders will keep their focus on outside markets.

Soybeans: 2 to 4 cents lower. Futures were weaker overnight amid dollar strength and technical weakness -- which seems to build on itself. A stepped up harvest pace is also weighing on the market. Traders expect this morning's Grain Stocks Report to put 2010-11 carryover at 225 million bushels. Traders will also be evening positions as they close their books for the month and wrap up the third quarter.

Wheat: 1 to 2 cents lower. Futures were weaker overnight on spillover from negative outside markets and neighboring pits. Traders have a flurry of fresh data to factor into prices this morning. Traders expect this morning's Small Grains Summary to show a drop in the size of the U.S. wheat crop to around 2.046 billion bushels. Nearby Minneapolis futures rallied sharply yesterday in advance of the report due to expectations USDA will trim the size of the spring wheat crop.

Live cattle: Mixed. Futures are expected to be mixed as traders wait on cash trade to develop. Traders have higher trade priced into the market and are now just waiting on trade to begin sometime today. Packers are in need of supplies and this week's showlist is tighter. Otherwise, upside potential will be limited by negative outside markets amid ongoing economic concerns.

Lean Hogs: Mixed. Traders faded a negative Hogs & Pigs Report yesterday, instead remaining their focus on strong demand -- which is doing a good job of chewing through growing supplies. However, the cash hog market is expected to be mostly steady today, with some weaker undertones.


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