Traders Reducing Risk in Commodities

November 17, 2011 12:38 AM

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

Corn: 5 to 6 cents lower. Futures weakened overnight amid continued dollar strength, as the U.S. dollar index climbed back above $78.00. Crude oil and gold futures are sharply lower this morning amid risk aversion due to heightened concerns about the euro-zone.

Soybeans: 5 to 6 cents lower. Futures were weaker overnight as traders' concerns about the euro-zone debt crisis spreading are rising. Bond yields jumped this week for essentially every euro area government except Germany as investors have little hope policy makers will pull in the reigns on the crisis.

Wheat: 1 to 4 cents lower. Futures saw spillover from neighboring pits overnight, as well as from negative outside markets. Heightened euro-zone debt woes have traders looking to reduce risk in the commodity markets. Without fresh demand news wheat is vulnerable to stepped up selling.

Live cattle: Steady to higher. Buyers will be cautious due to negative outside markets, but futures are seen supported by strength in the beef market. Choice beef values rose $1.20 and select was up 55 cents yesterday on strong movement of 236 loads. Traders are still waiting on cash cattle trade to begin, but this week's tighter showlist gives feedlots more bargaining power.

Lean Hogs: Steady to weaker. Futures are expected to be weaker on continued pressure in the cash market. Pork cutout values stabilized yesterday, but packers say they are having no difficulty securing supplies. December lean hogs are trading in line with the cash market, which could limit pressure on the nearby contracts.


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