Pro Farmer Senior Markets Editor
From Pro Farmer
Updated as of 7:00 a.m. CT
Awaiting jobs data... Grain
futures were firmer overnight on dollar weakness and short-covering in the crude
oil market. How outside markets react to this morning's jobs report will have
an impact on grain trade this morning. The Labor Department is expected to announce
another 648,000 jobs were lost in February, based on a Reuters survey, when
they report monthly nonfarm payrolls this morning. Through January, the U.S.
had already lost 3.6 million jobs since Dec. 2007. The unemployment rate is
expected to rise to 7.9%. If the jobs data comes in more bearish, it will pressure
financial markets, but if jobs data isn't quite as bad as thought, it could
bring some short-covering. Kind of crazy the jobs report will have this much
of an impact on the commodity markets, eh?
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Opening calls. These calls originate more than three hours before the open -- use caution, things change:
Corn: Steady to 4 cents higher. Futures were supported overnight by
dollar weakness. Futures closed 5 to 6 cents lower yesterday, which was a
mid-range close. Outside markets triggered profit-taking pressure following
Wednesday's gains. How markets close the week will be determined by outside
markets. Support for May corn lies at Monday's low of $3.44 1/2, with resistance
at last week's high of $3.80 1/2.
Soybeans: 3 to 7 cents higher. Futures were higher overnight amid
dollar weakness. Futures closed 10 to 16 cents lower yesterday, pressured
by outside markets. Yesterday bean futures were hit with profit-taking pressure
following Wednesday's corrective gains, as outside markets triggered widespread
commodity selling. Strength in the dollar and weakness in the U.S. stock market
triggered selling in the commodity markets.
Wheat: 4 to 6 cents higher. Futures were firmer overnight on spillover
from neighboring pits. Futures posted a low-range close yesterday, finishing
around 8 cents lower. The Continuous Commodity Index erased about half of
the previous day's gains to remain within the month-long consolidation range.
How commodity markets finish the week will be highly dependent on outside
markets. May Chicago wheat briefly penetrated resistance at yesterday's high
but posted a low-range close. Support lies at this week's low of $4.98 1/2.
Cash cattle expectations: Waiting
on active trade. Nebraska feedlots actively sold cash cattle at steady prices
with trade earlier this week, which was mostly around $1 higher than last week's
price. Kansas and Texas feedlots haven't pulled the trigger yet, but traders
are anticipating steady to firmer cash bids around $82 to $83.
Futures call: Mixed. Futures are called to open mixed on the possibility
of short-covering, as traders wait on active cash trade to begin. Yesterday,
June cattle posted a downside day of trade on the charts, but finished near
the middle of the day's range. The contract is near the mid-point of the recent
trading range that has support at the February low of $80.45 and resistance
at last week's high of $84.42.
Cash hog expectations: Steady to
weaker. Cutting margins have fallen very deep into the red, but cash sources
expect packers to offer steady to slightly firmer bids for cash hogs to close
out the week. Demand for hogs is said to be solid amid declining supplies. It's
surprising packers haven't opted to reduce kill runs, which signals they may
anticipate a near-term pickup in pork demand.
Futures call: Mixed. Futures are called to open mixed amid spreading.
Traders factored in seasonal improvement amid tightening supplies, which lifted
nearby futures. The CME lean hog index is projected up 76 cents to stand at
$57.36. April hogs are trading at around a $5.00 premium to the cash index,
which opens the door to significant near-term profit-taking.