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Overnight highlights. Following are highlights of overnight trade (as of 6:35 a.m. CT) and opening livestock calls:
Corn: 7 to 8 cents higher. Futures are benefited from followthrough from yesterday's late-session gains as traders work to rebuild long positions ahead of tomorrow morning's USDA reports. Traders look for USDA to slash corn yields by around 20 bu. per acre from last month and tighten 2012-13 carryover to very tight levels. December corn rose to a new contract high this morning. A high-range close and followthrough buying tomorrow would signal the next leg up in the market has begun.
Soybeans: 7 to 8 cents higher. Soybean futures have seen light trade so far, with futures posting slight followthrough from yesterday's late-session recovery. Traders don't want to be caught short ahead of tomorrow morning's USDA reports, but the market remains in a short-term downtrend from the August high. November beans need to move back above $16.20 to suggest the market has posted a near-term low in the month-long choppy trading range.
Wheat: 4 to 6 cents higher. Wheat futures at all three exchanges are benefited from followthrough from yesterday's gains and spillover from corn futures. Given prospects of tightening corn supplies, traders recognize feed supplies will be tight. September Chicago wheat is pivoting around $9.00 this morning, but has posted a fresh weekly high. Buying is being limited by strength in the U.S. dollar index.
Live cattle: Steady to higher. Futures are expected to see a boost from ongoing strength in the beef market. Choice values rose $1.52 yesterday and Select was up $1.40 on very strong movement of 275 loads. Combined with this week's tighter showlist, expectations are rising for $1 to $2 higher cash cattle trade with last week's $118 trade. Traders are comfortable with the $4 premium August live cattle carry to last week's cash trade.
Lean Hogs: Mixed. Following yesterday's strong round of short-covering, lean hog futures are expected to be mixed. Some followthrough buying is expected as nearby contracts still hold a discount to the cash index, although concerns about packer demand are building. Pork cutout values slipped 32 cents yesterday on moderate movement of 67.5 loads. With packers margins barely in the black, expectations are for mostly steady bids this morning as supplies are adequate.