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Overnight highlights. Following are opening grain and livestock calls at 7:00 a.m. CT:
Corn: 1 to 4 cents lower. Corn is seeing light profit-taking pressure as traders' focus turns to evening positions ahead of the weekend. But as we have seen throughout the week, the start of open-outcry trade will likely be trend-setting. If pit traders view overnight weakness as a buying opportunity it will keep this week's uptrend solidly in place. Old-crop futures have seen a lift this week due to tightening supplies, but prices are nearing levels that have slowed demand dramatically in the past. Traders' focus is also beginning to shift toward next week's key Quarterly Grain Stocks and Prospective Plantings Reports. Informa Economics will reportedly release their acreage estimates this morning.
Soybeans: 2 to 4 cents lower. Soybean futures are seeing light profit-taking pressure following yesterday's double-digit gains. But the market is still working on solid gains for the week. Shipping delays at Brazil's ports has provided the market with its latest lift, but as yesterday's weekly export sales report showed, this hasn't resulted in an immediate uptick in demand for U.S. soybeans. Meanwhile, the Argentine ag ministry released its first forecast for the 2012-13 bean crop, pegging it at a record 51.3 MMT. Traders' focus will also be on evening positions ahead of the weekend and as traders look forward to evening positions for next week's key reports.
Wheat: 2 to 3 cents lower. Wheat futures are seeing spillover from neighboring pits as well as concerns that recent strengthening in the U.S. dollar index has softened demand for U.S. wheat. Traders continue to digest news out of Ukraine. The latest is that it may raise its grain export forecast for 2013-14 to 27 MMT due to expectations for a record crop in excess of 53 MMT. May Chicago wheat futures this morning are trading at around a 3 cent discount to May corn futures, which signals the market is still searching for demand.
Live cattle: Steady to firmer. Live cattle futures are expected to find support this morning as traders' focus turns to evening positions ahead of this afternoon's Cattle on Feed Report. The report is expected to show On Feed at 93.5%, Placements at 91% and Marketings at 92.7% of year-ago levels. Meanwhile, it's interesting to note that Select boxed beef values moved to a 26 cent premium to Choice values yesterday. This suggests demand for lower-quality cuts is on the rise, but will eventually rebuild demand for higher-quality cuts which are now less expensive (funny how that works!). April live cattle ended the day yesterday at around a $1.50 premium to this week's $125 cash cattle trade, which signals traders believe a near-term low is close at hand.
Lean hogs: Steady to firmer. Lean hog futures are expected to enjoy followthrough from yesterday's gains as well as support from a much-overdue rebound in pork cutout values. Pork values jumped $1.09 yesterday to lift packers' profit margins, but movement slowed to just 34.13 loads. Traders are also working to even positions ahead of this afternoon's Cold Storage Report. The report takes on an increasingly important rule given traders are concerned about demand. The rate at which stocks build from last month or year-ago levels will help direct price action next week. The cash market is called steady to lower as packers are having no difficulty securing supplies for next week's holiday-shortened kill schedule.