Grain markets were closed overnight and will open at 9:30 a.m. CT. The U.S. dollar index is currently weaker, but has been choppy this morning. Investors remain nervous about the inability of Congress and the Obama administration to strike a deal to break their deadlock over the fiscal cliff.
Corn futures are called to open steady to 2 cents higher on spillover from soybeans.
- Following Monday's choppy day of trade that included little fresh news for the market to digest, lackluster trade is expected this morning.
- Firmness in the U.S. dollar index this morning could attract fresh short-covering in the corn market.
- Corn could also enjoy some spillover from soybean futures.
- Technically, bears still hold then near-term advantage and March corn needs to return above $7.30 to signal a near-term low is in the works.
Soybean futures are called 3 to 5 cents higher on followthrough from Monday's gains.
- Soybeans are expected to benefit from followthrough from Friday's high-range close.
- Additional support should come from USDA's announcement of a 115,000 MT soybean sale to China and a 108,000 MT soybean sale to an unknown destination -- all for 2012-13.
- But with rains in the forecast for southern and central Brazil over the next five days, buying could be limited.
- January soybeans need to return above $15.00 to signal bears are losing their grip on the market.
Wheat futures are called 1 to 3 cents higher on spillover from neighboring pits.
- Wheat futures are expected to follow the corn market's lead.
- Price action was lackluster on Monday and given the lack of fresh news, more of the same holiday trade is likely today.
- Slight weakness in the U.S. dollar index could trigger some short-covering, especially if corn is firmer-than-expected this morning.
- Wheat futures have a lot of work ahead to signal a near-term low has been posted. March Chicago wheat needs to return above last week's high of $8.22 3/4 to begin the process of securing a low.
Live cattle futures are called weaker on followthrough from Monday's losses.
- Futures are called weaker on followthrough from Monday's slight to moderate losses.
- Traders are disappointed by last week's Cattle on Feed Report and are working to narrow the premium nearby contracts hold to last week's cash market.
- Traders are concerned beef demand will soften after the holidays, especially if Washington is unable to come up with a fiscal cliff deal.
- Cash sources look for packers to begin offering their bids this afternoon and both sides will be watching the beef market for cash clues.
Lean hog futures are expected to see a choppy start as traders gauge the cash market.
- The cash hog market is expected to be mostly steady this morning as packers say they are well supplied for their holiday-shortened kill schedules. However, some weather disruptions in the eastern Midwest could firm bids there.
- Buying in nearby futures should be limited by the hefty premium those contracts hold to the cash index.
- Traders are also tasked with evening positions ahead of Friday's Hogs & Pigs Report, which is expected to show All Hogs & Pigs, Kept for Breeding and Kept for Marketing at about 99% of year-ago levels.