Ahead of the Open: Corn, Soybean and Wheat Futures Trade Quietly Overnight

Posted on 01/12/2018 8:01 AM

Crop calls

Corn: Fractionally to 1 cent firmer
Soybeans: Fractionally to 1 cent firmer
Wheat: Mixed

Corn, soybean and wheat futures traded in mostly a 1-cent range overnight as they are largely on the sidelines ahead of this morning’s 11:00 CT USDA reports. With so much data released this morning, somebody is bound to be surprised, which will result in more volatile price action as the day progresses. Traders expect USDA to reflect winter wheat producers reduced acreage for the 2018 crop while Dec. 1 corn and soybean stocks are expected to be record large.

Meanwhile, the U.S. dollar index is sharply lower this morning. While this increases the U.S.’s competitiveness on the global market, traders have been disappointed by recent weekly export sales data. A pickup in daily soybean sales announcements was seen this week, but traders have been more focused on favorable Brazilian weather and rains in the forecast for Argentina. Also this morning, USDA announced an unknown destination purchased 320,000 MT of 2017-crop corn, which also signals prices are a value.

 

Livestock calls

Cattle: Mixed
Hogs: Slightly lower

Hog futures are vulnerable to followthrough from yesterday’s losses, with traders focused on narrowing the premium futures hold to the cash index. Meanwhile, the cash market has posted impressive gains this week. Packers have seen profit margins tighten this week, but that hasn’t stopped them for keeping kill lines running as full as possible, as week-to-date kill is running 95,000 head above year-ago.

Cattle futures are working on weekly losses and could see some short-covering this morning as they hold a discount to their respective cash markets. Choice boxed beef values declined 99 cents yesterday, but are still higher for the week.

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