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Overnight highlights. Following are highlights of overnight trade and opening calls:
Corn: Steady to 1 cent lower. Corn posted a strong gap higher start to 2012 and saw just a slight pullback in overnight trade due to firmness in the U.S. dollar index. The U.S. stock market was also stronger yesterday, adding to bullish enthusiasm in the commodity markets. Key for March corn is to move above the November high of $6.76 1/4 in order to further improve the technical situation of the market and open additional upside potential.
Soybeans: 1 to 3 cents lower. Nearby futures were slightly lower overnight, with deferreds mixed. March soybean futures entered yesterday's gap area in overnight trade amid light profit-taking. The dollar is firmer after yesterday's plunge, but traders remain concerned about the South American weather situation. Hot and dry conditions across Argentina are expected to continue the next 7 to 10 days, adding to crop stress.
Wheat: 3 to 4 cents lower. Without help from neighboring pits and outside markets, wheat is vulnerable to profit-taking. However, wheat is a value buy compared to corn, as March Chicago wheat is trading at a discount to March corn futures. Wheat needs a dose of fresh demand news to keep bulls interested.
Live cattle: Mixed. Cattle futures are expected to see a mixed start after futures trimmed gains yesterday. Traders are waiting on cash cattle trade, which has mixed signals. This week's showlist is about steady with last week, meaning how the beef market performs will be key. Beef movement was solid to start the week at 172 loads, signaling retailers are planning on post-holiday features. But prices were mixed.
Lean Hogs: Mixed. Nearby lean hog futures rallied into the close to post strong gains. But with nearbys trading at a premium to the cash index, there's some room for a correction, although near-term attitudes toward the cash market are positive. Pork cutout values firmed 45 cents yesterday, but packers' profit margins have tightened. It's positive hoglots are not overly backed up after two shortened kill weeks, but packers will have no difficulty securing supplies this week.