November Soybeans Pivoting Around $15.00

October 16, 2012 01:28 AM

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Overnight highlights. Following are highlights of overnight trade (as of 6:30 a.m. CT) and opening livestock calls:

Corn: 4 to 7 cents higher. Futures were able to recover a portion of yesterday's losses amid short-covering and help from the dollar index. But bears certainly hold near-term momentum, as the tight stocks situation is factored into prices and there's little fresh news to digest. Demand continues to slow, as highlighted by another disappointing weekly export inspections report.

Soybeans: 6 to 10 cents higher. Futures saw a lift in overnight trade thanks to ideas yesterday's losses were overdone, as well as from weakness in the U.S. dollar index. November beans are pivoting around $15.00 this morning, with the next key support at the bottom of the early July gap area of $14.78. While demand is still strong, the lack of fresh news has traders lightening their long exposure to the market. Prices have yet to reach that "value" level that sparks buying in futures.

Wheat: 5 to 8 cents higher. Futures are enjoying corrective short-covering and help from weakness in the dollar index. Despite the continued slowdown in demand, wheat is holding together fairly well, as it remains in its long-lasting consolidation range due to tightening global supplies. Otherwise, there's little fresh news for traders to factor into prices.

Live cattle: Steady to higher. Futures are expected to see a boost from the strong start to the boxed beef market for the week. Choice values rose $2.29 and Select is up $1.85 on solid movement of 152 loads. This week's showlist is tighter than last week, which gives feedlots more bargaining power in cash negotiations. October live cattle are trading at a slight discount to last week's cash, which opens the door to fresh upside potential.

Lean hogs: Steady to higher. Futures should see a boost from strength in the pork cutout market, as values rose 83 cents yesterday to lift packers' profit margins. The cash hog market is expected to be mostly steady today, as there are plenty of hogs to draw from this week. Expectations that pork cutout values will begin to soften seasonally soon should limit buying in futures.


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