Pressure on Soybean Futures Deepens

06:42AM Oct 03, 2012
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Overnight highlights. Following are highlights of overnight trade (as of 6:40 a.m. CT) and opening livestock calls:

Corn: 7 to 9 cents lower. Futures are seeing spillover from soybeans, as well as from news FC Stone increased its crop estimate to 10.824 billion bu, with the national average yield at 123.9 bu. per acre. Limiting pressure on futures is the tighter-than-expected carryin estimate for 2012-13, although price weakness signals that is factored into prices.

Soybeans: 11 to 14 cents lower. Soybean futures continue to be pressured by reports from better-than-expected yields. This thought was perpetuated by news FC Stone has increased its soybean crop estimate to 2.849 billion bu., with the national average yield at 38.2 bu. per acre. Earlier in overnight trade, November beans came within 4 cents of the $15.00 level as technical selling continues to accelerate the downtrend.

Wheat: 6 to 14 cents lower. Wheat is seeing spillover from soybeans, as well as a lack of fresh positive news. Although supplies in the Black Sea region are dwindling, the sales pace for the U.S. has remained steady. Strength in the U.S. dollar index this morning is adding to weakness. While recent rains have been beneficial in the U.S. Southern Plains and areas of Australia, more rains are needed and dryness across the FSU is raising concern about establishment of the winter wheat crop there.

Live cattle: Steady to firmer. Futures are expected to see a lift from strength in the boxed beef market, as Choice values improved $1.30 yesterday and Select firmed 14 cents on strong movement of 211 loads. This is raising some optimism that cash will come in steady with last week's $123 trade, although packers working with negative profit margins are hesitant to bid steady to firmer for cattle this week.

Lean hogs: Higher. Futures are expected to see a boost from yesterday's $3 surge in pork cutout values, with strong gains seen across the cuts yesterday, but bellies leading the way. This helped to lift packers' profit margins and should improve demand for cash supplies today.