Soybeans Lead Overnight Gains

November 3, 2011 01:37 AM

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

Corn: 4 to 8 cents higher. Nearby futures are mostly 8 cents higher overnight on help from dollar weakness. But all in all, corn remains in its month-long consolidation range, gaining momentum for its next trending move. Traders will be watching to see if there's any surprising demand in this morning's weekly export sales data. A very light sales tally is expected since no big announcements were made last week. But prices certainly remain in the "value" range -- an area that sparked substantial buying in the past.

Soybeans: 22 to 24 cents higher. Futures saw sharp buying overnight on help from dollar weakness, but remain in the boundaries of the downtrending channel established from last month's high. Chinese bean futures were higher overnight, boosted by talk China may ease its monetary policy, which would make it less expensive for companies to acquire lines of credit to import grain. However, the highly liquid global economic situation will limit buying interest today, as all eyes are on the start of the G20 meeting.

Wheat: 6 to 8 cents higher. Futures saw spillover from neighboring pits overnight, as well as help from dollar weakness. But global economic uncertainties due to the fluid euro-zone situation have investors nervous about adding risk at this point. Wheat needs a dose of fresh demand news, as global supply concerns have eased. The FAO raised its global wheat production forecast slightly from last month.

Live cattle: Mixed. Futures were mixed amid spreading yesterday, with nearbys higher amid continued bullish enthusiasm about tightening supplies and continued strong demand. February live cattle gapped higher on the open, filled the gap and closed near opening levels to improve the near-term technical outlook. Boxed beef prices softened yesterday, but movement was strong. This week's cash trade is thought to be mostly complete -- with trade in a wide range of $119 to $124.

Lean Hogs: Steady to weaker. Futures are called to open weaker in reaction to yesterday's sharp drop in pork cutout values. Pork values dropped $1.18 yesterday -- a signal demand is not keeping pace with rising supply. But given the big increase in pork supplies over the past month, it's impressive to see pork cutout values remain above $90.00. The cash hog market is called mostly steady today, with some lower undertones due to plentiful supplies.


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