Waiting on Employment Report

January 6, 2012 12:33 AM

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

Corn: 1 to 5 cents higher. Futures enjoyed light short-covering overnight following sharp daily losses. Outside markets are slightly positive this morning, as the U.S. dollar index sees a very light corrective pullback. The 7:30 a.m., CT monthly Employment Report will set the tone for the morning, as all eyes remain on the economy. Also this morning, USDA will release its weekly export sales data.

Soybeans: 6 to 7 cents higher. Futures enjoyed short-covering on ideas yesterday's losses were overdone. Futures filled the Tuesday gap area yesterday to hint of a near-term top in the works. But as stated in corn, this morning's price action will be driven by the monthly jobs data, as well as the weekly export sales report.

Wheat: 5 to 7 cents higher. Futures saw light short-covering overnight on spillover from neighboring pits. Wheat needs a dose of positive fresh demand news, but this morning's Egyptian wheat tender is not expected to include U.S. wheat. Bears have regaining the near-term technical advantage. To return control back to bulls, futures need to return above this week's highs.

Live cattle: Weaker. Futures are expected to be pressured by yesterday's sharp drop in boxed beef values. Choice values dropped $2.56 and Select slipped by just 33 cents to narrow the spread between the two. Movement was strong at nearly 300 loads, but softer prices don't bode well for cash improvement. Cash cattle trade began in Nebraska yesterday at $1 lower than last week.

Lean Hogs: Weaker. Lean hog futures are expected to see followthrough from yesterday's losses, as well as softness in the pork market. Pork cutout values slipped 38 cents yesterday to further tighten packers' profit margins. The cash market is expected to be steady to possibly firmer again, however, as packers work to secure supplies for early next week. Packers are apparently short bought coming out of the holidays and have had to dig into profit margins to attract hogs this week.


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