Welcome to February!

February 1, 2012 12:50 AM

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

Corn: 3 to 9 cents higher. Futures were supported by dollar weakness overnight -- with March corn moving above last week's high. Improvement in Gulf corn basis signal a tightening of supply and/or continued improvements in demand, which helped to lift futures late yesterday. The flip of the calendar to February is expected to bring followthrough buying, but traders also have the "February break" on their minds (which typically results in a mid-February low).

Soybeans: 4 to 8 cents higher. Futures strengthened overnight on help from dollar weakness and on spillover from corn. March corn returned above the psychological $12.00 level overnight but needs to move above last week's high of $12.31 to signal bulls have regained control. Rains in dry areas of South America weighed on soybeans to start the week, but focus is returning to signals of demand improvements through strengthening Gulf basis levels -- even in the deferred months.

Wheat: 6 to 11 cents higher. Futures were supported overnight by demand improvements, as traders react to growing expectations the Russian government will limit wheat exports. Traders are also watching the weather and noting frigid temps in northern Europe and the FSU -- increasing the likelihood of winterkill. March Chicago wheat posted a fresh monthly high overnight, making $6.90 next resistance.

Live cattle: Mixed. Futures are called to open mixed following yesterday's gains as traders wait on cash signals. Futures were supported overnight by the bullish supply situation, as the Cattle Inventory Report reflected a tightening supply situation this year and next. Meanwhile, cash expectations are varied. Choice beef values were down 35 cents yesterday and Select declined 60 cents on decent movement of 226 loads. But with packers' profit margins deep in the red, they are hesitant to raise bids -- meaning cash negotiations will last well into the week.

Lean Hogs: Mixed. Futures are expected to be mixed, but could favor a firmer tone on improved demand for cash hogs. This comes despite negative profit margins, as some packers are short bought amid tighter supplies. Pork cutout values rose $1.26 yesterday -- raising expectations of demand improvements. Further improvements in pork cutout are needed, however, to lift packers' margins out of the red.


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