Profit-Taking Amid Lack of Fresh News

October 28, 2011 01:14 AM

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Overnight highlights. Following are highlights of overnight trade and opening calls:

Corn: 3 to 5 cents lower. Futures posted sharp gains yesterday as the investment world reacted to the euro-zone's plan to deal with its debt issues. The U.S. dollar plummeted sharply and grain futures rallied into the close. But with that news now factored in, the dollar firmed overnight and grain futures saw light pressure. Corn needs fresh news to interest market bulls.

Soybeans: 6 to 7 cents lower. Futures were weaker overnight amid a lack of fresh news. The U.S. Dollar index is firmer this morning and crude oil is back under pressure. With the EU debt resolution news factored into the markets, soybeans need fresh demand news to move the next step higher. Traders will also be evening positions as they begin to close their books for the month, although Monday is the last trading day of October.

Wheat: 3 to 7 cents lower. Futures saw double-digit gains yesterday in reaction to the euro-zone debt news, but faced light pressure overnight as the dollar firmed. Wheat is in a follower's role, but has also been supported recently by crop quality concerns and concerns about the lingering drought in the Southern Plains.

Live cattle: Steady to lower. Futures reacted negatively to news of $120 cash cattle trade picking up in the Southern Plains yesterday. Given slight strength in the U.S. Dollar index this morning, followthrough pressure is expected. However, with nearby cattle futures trading in line with this week's cash, pressure should be limited.

Lean Hogs: Steady to lower. Futures are called to open weaker on spillover from widespread profit-taking in the commodity markets, as well as building market-ready supplies. The cash market is called steady to lower to finish the week as packers work to keep profit margins in the black and have plenty of supplies to draw from. However, pressure should be limited by the discount nearbys hold to the cash index.


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