Short-Covering Lifts Corn, Soybeans

November 15, 2011 12:32 AM

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

Corn: 1 to 3 cents higher. Despite strength in the U.S. dollar index, corn futures saw light short-covering support following yesterday's decline. December corn tested support at the November low yesterday, which triggered some value buying overnight. Price action is likely to be choppy near-term, with downside risk limited by the tight stocks situation and upside potential limited by a lack of fresh news and global economic worries.

Soybeans: 12 to 13 cents higher. Futures were stronger overnight, benefiting from expectations China will ease its monetary policy, which would bolster demand for commodities. Soybean futures are trading in the lower half of the October-November trading range, which traders say is "value buy" levels. Strength in the U.S. Dollar index overnight amid ideas economic troubles are more worrisome abroad than at home, could limit buying in morning trade.

Wheat: Mixed. Strength in the U.S. Dollar index limited buying to short-covering overnight, with futures favoring a weaker tone. Wheat remains in a follower's role, but needs strong spillover from corn to move higher. The U.S. stock market is expected to add to a negative tone in outside markets this morning, with euro-zone debt fears hanging over the market.

Live cattle: Steady to higher. After a choppy start to the week, live cattle are expected to find support from strength in the beef market. Choice beef values were $1.38 higher and Select rose $2.39 yesterday on strong movement of 147 loads. Meanwhile, weakness in the U.S. Stock market will limit buying enthusiasm in the cattle pit this morning.

Lean Hogs: Steady to weaker. Futures are expected to be weaker this morning on spillover from negative outside markets and ongoing cash concerns. Pork cutout values were softer yesterday, which limits packers willingness to raise bids. Cash bids are expected to be steady to weaker again today, as packers say they are having no difficulty securing needs.


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