Pro Farmer Senior Markets Editor
From Pro Farmer
Updated as of 7:00 a.m. CT
Lower start expected... The grain
markets saw light pressure in overnight trade (although corn saw mixed trade)
due to weakness in the crude oil market and stock futures signaling additional
pressure is ahead today for the stock market.
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Opening calls. These calls originate
more than three hours before the open -- use caution, things change:
Corn: Mixed. Futures were narrowly mixed overnight. Futures posted
mild corrective gains Friday to finish slightly higher for the week. Earlier
in the week, futures dropped below support at the October lows this week,
but failed to close below that level. As a result, that spike of support could
turn into a bear trap -- if followthrough buying is seen in corn futures this
Soybeans: 4 to 9 cents lower. Futures were weaker overnight, with
nearbys mostly 4 to 5 cents lower. January soybeans closed last week about
26 cents below the previous week's close. Futures were supported by short-covering
to close out the week, with dollar weakness providing much of the support.
But while the dollar softened Friday, its chart pattern is still bullish.
How outside markets perform will largely drive grain market action this week.
Wheat: 1 to 6 cents lower. Futures were slightly lower overnight
on spillover from neighboring pits. March Chicago closed last week about 33
cents above the previous week's close to return to the upper portion of the
month-long consolidation range. If futures fail to find buyers near the top
of the range, it will signal the correction has been exhausted.
Cash cattle expectations: Watching
beef trade. Feedlots actively moved cash cattle at $1 lower prices
around $93 in the Plains last Friday afternoon. The disappointing cash cattle
trade threatens to keep cattle futures under pressure to start the week even
though futures are trading at a discount to the cash market. In turn, pressure
on cattle futures would point cash cattle prices lower again this week.
Futures call: weaker. Futures are called to open weaker on expectations
for selling in the stock market. Futures faced late-session selling pressure
on Friday to finish on or near session lows. For the week, live cattle futures
posted sharp losses. The disappointing cash trade may put additional pressure
on cattle futures this morning, although futures are already at a big discount
to the cash market.
Cash hog expectations: Mostly steady.
Cash hog bids are expected to open the week steady at most Midwest locations,
although some firmer bids are also anticipated. Despite plentiful market-ready
supplies, most packers are in need of early week slaughter needs and are working
with profitable margins. As slaughter runs fill up, however, cash hog bids could
soften later in the week.
Futures call: Mixed. Futures are called mixed amid spreading. Futures have returned to test
downtrending resistance, but with nearby contracts trading at a premium to
the cash index, surpassing that level next week seems unlikely -- or at