Light Followthrough Buying Overnight

December 20, 2011 12:38 AM

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

Corn: Steady to 1 cent higher. Futures saw light followthrough buying overnight after yesterday's double-digit gains thanks to weakness in the U.S. dollar index. March corn is pivoting around the psychological $6.00 level and needs closes above the late November high of $6.16 to signal a near-term low has been posted. Little fresh news could create lackluster, holiday-type trade.

Soybeans: 4 to 5 cents higher. Futures were firmer overnight on followthrough from yesterday's strong gains, in part thanks to dollar weakness. The South American weather forecast is also supportive, as hot and dry conditions will increase stress to crops in southern and central Brazil this week, say forecasters. Showers later in the week will help ease stress, but aren't expected to be widespread. Scattered rains and cooler air will ease stress in Argentina the next few days, but rain isn't as promising as in previous weather models.

Wheat: Mixed. Wheat futures were mixed overnight, with nearbys firmer on spillover from neighboring pits. Without fresh demand news to digest, wheat needs help from outside markets and neighboring pits. The U.S. dollar index is weaker this morning -- spurring widespread (although light) commodity buying overnight.

Live cattle: Steady to higher. Futures are vulnerable to profit-taking following yesterday's sharp to limit gains, but concerns are valid about the blizzard in the Southern Plains, which is expected to disrupt cattle marketings this week and stress feedlots. A powerful storm that began on Monday morning will create dangerous winter conditions complete with heavy snow, high winds and falling temperatures. This week's cattle showlist is down from last week, further raising cash expectations.

Lean Hogs: Mixed. Futures enjoyed spillover from sharp gains in the cattle pit yesterday. Traders narrowed the discount nearbys hold to the cash index yesterday. The cash hog market is expected to be steady to $1 lower again this morning as packers say supplies have largely been booked for the week and only light buying is expected ahead of the Christmas weekend. Pork cutout values firmed 14 cents yesterday and packers are enjoying profitable margins, but have no reason to bid up for hogs.


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