Traders Even Positions Ahead of the Weekend

January 20, 2012 12:15 AM

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

Corn: 1 to 5 cents lower. Futures were weaker overnight amid firmness in the U.S. dollar index. Futures firmed yesterday amid short-covering, but bears certainly have the upper hand after sinking below last week's low. Traders will have this morning's USDA Weekly Export Sales Report to help determine the open. Fresh demand has surfaced on price weakness, signaling prices have fallen far enough -- at least for now.

Soybeans: 3 to 5 cents lower. Futures saw two-sided trade overnight, but as of late were near session lows amid profit-taking on dollar strength. There is a lot of market chatter about China making a large soybean purchase this week, but only a small sale for the upcoming marketing year has been confirmed.

Wheat: Mixed. Futures favored a weaker tone in mixed trade overnight, with the front-month Chicago contract pivoting around unchanged. Wheat remains in a follower's role to the corn market, as well as watching outside markets. Wheat needs fresh demand news to signal prices have fallen far enough for now.

Live cattle: Mixed. Futures are expected to be mixed this morning as traders wait on cash cattle trade to begin. But due to winter weather arriving across the Corn Belt and areas of the Plains, as well as this week's tighter showlist, expectations are for steady to firmer trade. Packers raised bids yesterday, but feedlots still want to see higher bids yet. Traders will also be preparing for this afternoon's Cattle on Feed Report that is expected to show On Feed above year-ago, but Placements and Marketings below year-ago.

Lean Hogs: Steady to weaker. Futures are expected to be weaker this morning after pork cutout values softened 56 cents yesterday -- pushing packers' profit margins deeper into the red. But futures have generally strengthened this week as they anticipate a near-term cash low being posted. But with packers' profit margins remaining in the red, confidence of a near-term low is shaky.


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