Traders Focus on Evening Positions

November 8, 2012 12:31 AM

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Overnight highlights. Following are highlights of overnight trade (as of 6:45 a.m. CT) and opening livestock calls:

Corn: Mostly 1 cent higher. Futures are favoring a firmer tone in mixed trade, with upside potential limited to short-covering due to strength in the U.S. dollar index. Focus in the market today will be on position squaring ahead of tomorrow morning's USDA reports. According to pre-report expectations, traders look for USDA to lower the size of the crop slightly to 10.629 billion bu. and for carryover to climb slightly to 635 million bushels. Traders will also have the weekly export sales report to remind them of slow demand this morning.

Soybeans: 3 to 6 cents higher. Futures saw two-sided trade overnight, with buying limited by strength in the U.S. dollar index. But the back-and-forth price action continues as traders prepare for tomorrow key reports. Traders look for USDA to raise the size of the soybean crop slightly from last month and for 2012-13 carryover to climb by 3 million bu. to a still-tight 133 million bushels. Traders will also have weekly export sales data to factor into prices tomorrow morning.

Wheat: 1 to 2 cents higher. Wheat is enjoying spillover from neighboring pits and followthrough from yesterday's gains. But upside potential is being limited by strength in the dollar. Support this morning also comes from the UN's FAO reducing the global wheat crop further. Traders will be putting their finishing touches on positions tomorrow ahead of USDA's November Supply & Demand Report Friday morning. Traders look for USDA to trim 2012-13 carryover by around 12 million bu. from last month to 666 million bushels.

Live cattle: Mixed. Futures are expected to be mixed today as traders wait on cash trade to begin. Concerns about the boxed beef market have Choice beef values were 28 cents firmer yesterday and Select declined 209 cents. But movement was strong at 213 loads. Cattle were highly choppy yesterday, with sharp losses in the U.S. stock market contributing to the volatility. Expectations are for steady to lower cash cattle trade today or tomorrow.

Lean hogs: Mixed. Following yesterday's surge, lean hog futures are expected to be choppy as traders reevaluate positions. Nearby futures led gains yesterday as traders worked to narrow the discount December hogs hold to the cash index. But futures are much more in line with the index, which should help to stabilize futures today. Cash hog bids are called steady to lower, which could also temper bullish enthusiasm.


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