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Overnight highlights. Following are highlights of overnight trade (as of 6:35 a.m. CT) and opening livestock calls:
Corn: Mixed. December through December 2013 futures are marginally to 4 cents higher this morning, while far-deferreds are mostly 2 cents lower. There's little fresh news for the corn market to digest this morning, with traders still focused on Friday's USDA reports that showed carryover up more than expected from last month. But given the tight supply situation and news Japan increased its purchases of U.S. corn last week due to shipping delays in Brazil, traders are opting to cover short positions and keep futures within the boundaries of the consolidation range.
Soybeans: 16 to 20-plus cents lower. Futures are seeing followthrough from Friday's sharp losses, as traders still have USDA's bigger-than-expected crop and carryover projection on their minds. But also leading futures lower are improved weather conditions in South America. While wet conditions in Argentina signal more corn acres will be switched to soybeans, timely rains in northern Brazil are helping to alleviate drought conditions there. Technically, there is significant downside risk for the market as the early July gap area has been filled.
Wheat: 4 to 6 cents lower. Wheat is lower on spillover from losses in the soy complex and on spillover from negative outside markets. USDA raised wheat carryover more than expected last week, although concerns about the U.S. HRW wheat crop are helping to keep losses in check. Wheat remains within the boundaries of the multi-month choppy consolidation range, with December Chicago wheat pivoting around $8.80.
Live cattle: Mixed. Futures are expected to see a mixed start as traders wait for cash clues. But upside potential will be limited by sharp losses in the boxed beef market to end last week, as Choice values slipped $1.37 and Select was down $2.39. But strong beef movement last week signals pressure on prices should be easing. With packers' profit margins still in the red, they will not be willing to raise bids unless the beef market turns around.
Lean hogs: Mixed. Futures are expected to see a choppy start amid spreading. Pressure on nearbys will be limited by the discount those contracts hold to the cash market, while upside potential will be limited by expectations for steady to weaker cash hog bids. While packers' profit margins improved last week, they are having no difficulty securing supplies.