Wheat Leads Overnight Gains

January 10, 2013 12:28 AM

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Overnight highlights. Following are opening grain and livestock calls at 6:30 a.m. CT:

Corn: Steady to 3 cent higher. Corn is enjoying light followthrough from yesterday's gains and commercial buying continues ahead of tomorrow morning's key USDA reports. Traders look for USDA to trim the size of the corn crop from its previous peg, but for carryover to increase due to lackluster export demand. Corn still has a long ways to go to improve the technical situation, but bulls have momentum so far this week.

Soybeans: Mixed. Futures are narrowly mixed this morning in lackluster trade. Price action is being muted ahead of tomorrow morning's USDA reports, as traders don't want to be caught too long or too short ahead of the trend-setting data. Meanwhile, larger South American crops are taking the pressure off the U.S. to meet China's needs. According to official Chinese customs data, its soybean imports in 2012 of 58.38 MMT were up 11.2% from last year and December imports of 5.89 MMT were up 9% from year-ago levels.

Wheat: 4 to 7 cents higher. Wheat is being supported by weakness in the dollar index and short-covering ahead of Friday's key USDA reports. Traders look for winter wheat acreage to be up from year-ago, but for carryover to decline by around 11 million bu. due to improved demand. But this morning's weekly export sales data is expected to reflect slow holiday demand, which could weigh on the market.

Live cattle: Mixed. Futures are called mixed on the possibility of short-covering following yesterday's losses, but there is more near-term downside risk based on the premium February cattle hold to this week's cash trade of $128. Trade has not yet been active, but followup sales at similar levels are expected given this week's larger showlist. Boxed beef prices were mixed yesterday on strong movement of 266 loads.

Lean hogs: Mixed. Futures are due for some short-covering following yesterday's sharp losses, but followthrough pressure this morning would strongly point to near-term highs being in place. Traders worked to get February lean hogs more in line with the cash hog market yesterday and further pressure today would suggest they see more pressure coming in the cash market. The cash market is called steady to weaker as packers had no difficulty securing this week's supplies.


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