Week Highlighted By Choppy Trade in Grain Markets

December 7, 2012 12:28 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: 1 to 3 cents lower. Corn is weaker on followthrough from yesterday's losses, as the market has little fresh positive news to digest. Traders remain concerned about excessive rains in Argentina, although that is not "new" news. March corn futures are hovering above support at this week's low of $7.46 3/4 as it remains in the long-lasting consolidation range.

Soybeans: 3 to 5 cents higher. Soybeans are seeing followthrough buying after yesterday's gains to further improve the near-term technical outlook of the market. This week's strong gains strongly suggest a near-term low has been posted, but closes above $15.00 for the January contract are needed to confirm a low. Yesterday's stronger-than-expected weekly export sales data remains on traders' minds, as it reflects demand is well ahead of the needed pace to reach USDA's export forecast.

Wheat: Favoring a weaker tone. Wheat futures are favoring a weaker tone in mixed trade. Weakness in the corn market and strength in the dollar index is limiting buying, while strength in the bean pit is helping to limit losses. Traders continue to note drought in the U.S. HRW wheat belt and wet weather in Argentina as supportive factors, but these items aren't creating much bullish enthusiasm at this time.

Live cattle: Mixed. Futures are called to open mixed as traders wait on cash cattle trade to begin. Upside potential should be limited by continued weakness in the boxed beef market, although yesterday's late-sessions recovery could attract some followthrough buying. This week's showlist is up from last week and packers are still working with negative cutting margins. As a result, steady to weaker cash trade is expected.

Lean hogs: Steady to weaker. Futures could see some short-covering following yesterday's sharp losses, but followthrough pressure is expected given expectations the cash hog market has posted a near-term high. Pork cutout values slipped 67 cents yesterday to further worsen packers' profit margins. As a result, the cash market is called steady to lower to finish the week.


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