Traders Focus on Evening Positions

December 14, 2012 12:18 AM

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Overnight highlights. Following are highlights of overnight trade (as of 6:20 a.m. CT) and opening livestock calls:

Corn: Narrowly mixed. Futures have seen very little net price movement so far today, with pressure limited by slight weakness in the U.S. dollar index and strength in the soybean pit. Traders are digesting news this morning that South Korea has purchased 324,500 MT of optional-origin corn for shipment next spring. Shipments are expected from South America, also the sellers also have the option to supply corn from the U.S., said the sources.

Soybeans: 9 to 13 cents higher. Soybean futures are seeing a boost from strong demand, as weekly export sales have posted back-to-back weeks of 1-plus-MMT in sales. While buying from this news was tempered yesterday, futures are seeing a boost today as they come back to reevaluate positions. Traders are also digesting a report that manufacturing in China continues to pick up, which is another signal the economy is strengthening.

Wheat: 1 to 4 cents higher. Futures are seeing a boost from short-covering on ideas this week's losses are overdone. Some spillover from soybean futures is also being seen, although buying in wheat is limited by lackluster demand. Without fresh news, traders will be hesitant to do more than cover short positions heading into the weekend -- especially on the heels of USDA's bearish Supply & Demand Report earlier this week.

Live cattle: Mixed. Futures are called mixed as traders wait on cash cattle trade to develop. Weakness in Choice beef values could weigh on futures this morning, as it puts earlier expectations for higher cash trade into question. Feedlots are expecting around a $1 higher cash trade with last week due to tightening market-ready supplies, but packers are hesitant to raise bids due to negative profit margins.

Lean hogs: Mixed. Focus in the market today will be on evening positions, especially with the December contract expiring at noon CT today. December hogs ended yesterday at about a $1 discount to the cash index and February hogs are trading at around a $2.50 premium to the cash index. Cash bids are expected to be mostly steady today.


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