Post-Thanksgiving Trade: Grain Markets Stronger

November 26, 2012 12:36 AM

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Overnight highlights. Following are highlights of overnight trade (as of 6:35 a.m. CT) and opening livestock calls:

Corn: 3 to 6 cents higher. Futures are firmer to start the week on help from weakness in the U.S. dollar index, but with a lack of fresh news, upside potential is limited to short-covering. While off its November low, corn futures remain in the choppy consolidation range that has confined prices for three months.

Soybeans: 7 to 8 cents higher. Futures are seeing a lift from weakness in the dollar this morning, but upside potential is being limited by a lack of fresh news. With rains in the forecast for the next five days in Brazil, traders view conditions there as favorable. Soybeans still have a lot of work ahead to improve the technical price situation, as January beans need to at least return to $15.00 to signal a near-term low has been posted.

Wheat: 4 to 6 cents higher. Wheat is seeing a boost on spillover from neighboring pits and help from dollar weakness. But without a dose of fresh demand news, upside potential is limited as U.S. wheat is not competitively priced on the global market. Traders expect this afternoon's crop condition data to show further deterioration in the HRW wheat crop, which is supportive for the market.

Live cattle: Mixed. Futures are called to open mixed as traders gauge this week's cash trade potential. Cattle futures ended last week with strong gains on news of $2 higher cash cattle trade in the Southern Plains at $127 to $128. Key to building on those price gains will be if beef prices can continue to strengthen, which would signal retailers are preparing for a round of post-Thanksgiving features.

Lean hogs: Mixed. Futures are expected to see a choppy start to begin the week. December lean hog futures are trading at around a $4.50 premium to the cash index, which signals traders have a positive bias toward the cash market near-term, but also limits further buying interest especially as market-ready supplies are abundant.


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