Waiting on Fed's Decision

September 13, 2012 01:28 AM

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Overnight highlights. Following are highlights of overnight trade (as of 6:30 a.m. CT) and opening livestock calls:

Corn: Mixed. Futures are narrowly mixed this morning after yesterday's losses spurred by a lack of bullish USDA data. USDA didn't trim the size of the corn crop by as much as traders' expected and raised 2011-12 and 2012-13 carryover to represent demand destruction. More focus will be on outside markets this morning as investors wait on the Federal Reserve to make its statement about the economy. The dollar plunged yesterday on expectations another round of quantitative easing will be announced today.

Soybeans: Mixed. Futures are mixed this morning, but nearbys are favoring a weaker tone on light profit-taking following yesterday's sharp gains. Futures rallied into the close yesterday on signs prices have not yet dramatically rationed demand. USDA cut its 2011-12 carryover projection, but left 2012-13 carryover at a very tight 115 million bushels. Traders will be monitoring weekly export sales data this morning, as well as waiting on the Fed's decision about further stimulus measures.

Wheat: Mostly firmer. Wheat is mixed this morning, but is favoring a firmer tone as nearbys are mostly 5 to 6 cents higher. News Strategies Grains has cuts its estimate of the EU wheat crop to 53.7 million metric tons due to hot and dry conditions, is helping to limit pressure. USDA left its 2012-13 wheat carryover projection unchanged yesterday, but lowered its 2012-13 global projection due to cuts in some key global crop pegs.

Live cattle: Mixed. Futures are expected to be mixed, with buying in nearbys limited following yesterday's gains. Boxed beef prices were slightly higher yesterday on very strong movement of 236 loads changing hands. Given this week's showlist is smaller than last week and beef movement has picked up this week, traders are expecting $1 to $2 higher cash cattle trade by tomorrow afternoon with last week's $124 trade. Upside potential for futures, however, will be limited as nearbys already have a higher cash trade factored into prices.

Lean hogs: Lower. Futures are expected to be lower this morning in reaction to yesterday's $1.70 drop in pork cutout values. Traders were hopeful after the strong start to the week the pork market was working on a near-term low, so renewed weakness on pork prices opens fresh downside risk for futures. Nearby lean hogs are trading at a slight premium to the cash index and the cash market is expected to be mostly 50 cents to $1 lower this morning.


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