Ahead of the Open: Traders Focused on Year-end Position Squaring

Posted on 12/29/2017 8:08 AM

Crop calls

Corn: Fractionally to 1 cent lower
Soybeans: 1 to 2 cents higher
Wheat: Fractionally to 1 cent lower

Funds, which have been net sellers in the soybean market this week engaged in light short-covering efforts overnight. Traders are also keeping a close eye on the weather in South America, which still includes rains this weekend in Argentina, but overnight weather models did not include as much rain the second week of January and maintained next week’s hot and dry pattern.

Meanwhile, the U.S. dollar index continued this week’s plunge, as it moved to its lowest level since late September. This morning’s weekly export sales data was stronger-than-expected for corn, but non-inspiring for soybeans and wheat.

Livestock calls

Cattle: Higher
Hogs: Higher

Traders’ focus will be on year-end position squaring as well as the weather. Winter weather across the Midwest and frigid temps moving deep into the Southern Plains this week warrant some weather premium due to the stress it puts on animals.

Traders expect higher cash cattle trade to surface yet today and the cash hog market is called 50 cents to $1 higher as packers work to secure supplies for a large Saturday kill. Thinned volume raises the risk of price volatility and December live cattle futures expire at noon CT.

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