Grain Futures Strengthen Overnight

October 9, 2012 01:37 AM

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Overnight highlights. Following are highlights of overnight trade (as of 6:40 a.m. CT) and opening livestock calls:

Corn: 3 to 5 cents higher. Futures are enjoying light short-covering to erase yesterday's losses and return near Friday's closing levels. This all comes despite ongoing strength in the U.S. dollar index and a lack of fresh news. Traders' focus is on evening positions ahead of Thursday's USDA reports, in which traders look for USDA to lower the size of the corn crop. As a result, pressure on futures should be limited unless outside market pressures intensify.

Soybeans: 17 to 20 cents higher. Futures are posting double-digit gains this morning to more than erase yesterday's losses. But futures still have a lot of work ahead to turn the trend around. China's government announced it will auction 400,000 MT of soybeans on Thursday to stabilize domestic prices. All of the auctioned supplies are likely to be gobbled up. Meanwhile, traders expect USDA to raise the size of the U.S. crop on Thursday, which contributed to pressure on futures to start the week.

Wheat: 6 to 9 cents higher. Futures recovered late yesterday and are building on that performance this morning amid increased concerns about the global wheat crop. Freezing temps in the U.S. Southern Plains over the weekend and ongoing concerns about dry conditions in Australia and areas of Russia and Ukraine for the establishment of the crop remain on traders' minds.

Live cattle: Mixed. Futures are expected to see a choppy start, as negative outside markets are seen limiting early buying interest. But ongoing strength in the boxed beef market and this week's tighter showlist has traders expecting at least steady cash cattle trade with last week. Choice beef values were 58 cents firmer and Select rose 78 cents yesterday on moderate movement of 138 loads.

Lean hogs: Mixed. Futures are called mixed amid spreading. The cash hog market is expected to be mostly steady this morning as packers work to protect profit margins. Pork cutout values started the week 2 cents higher, which has traders talking about the possibility of the market reaching a seasonal high.


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