Price Action Choppy As Traders Return

May 29, 2012 01:34 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: 2 to 6 cents lower. Futures were pressured overnight, with heavier selling in the new-crop contracts after rains benefited crops in the northern and western Corn Belt areas over the weekend. But yesterday's NWS 6-10 day forecast calls for the return to hot and dry conditions across the Corn Belt, which would return stress to areas that saw rain this week and mount stress on areas that missed out on the much-needed precip.

Soybeans: 9 to 16 cents higher. Futures are benefiting from positive outside markets this morning, with the U.S. dollar index under pressure from growing hopes that Greece might avoid the feared exit from the euro-zone. Also supportive are growing expectations that China will soon announce a stimulus package to aid its slowing economy. The hot and dry 6-10 day forecast is also supportive, as much of the eastern and southern Corn Belt regions missed out on precip over the holiday weekend.

Wheat: 9 to 11 cents lower. Futures have seen a highly volatile day of trade and it's only 6:30 a.m. CT. Futures are currently under profit-taking pressure, but earlier were supported by positive outside markets. If early indications are any sign, look for back-and-forth price action to continue today as traders remain concerned about harvest results in the U.S. Southern Plains, but also note that harvest-related hedge pressure is mounting.

Live cattle: Mixed. Traders are anxious to see how beef movement was over the weekend and will be watching the boxed beef market this morning for signs of clearance. If movement is strong coming out of the holiday, it will signal weekend clearance was good. But if beef movement disappoints, it will raise concern about demand.

Lean Hogs: Mixed. Futures are called to open mixed, with pressure limited by positive outside markets. But concerns about packers' demand for hogs will limit buying. Packers' profit margins remain in the red. If pork clearance was strong over the holiday, it could raise demand for hogs, but there is a lot of work to do in order to bring packers' margins back into the black.


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