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** OPENING GRAIN CALLS **
Corn: 2 to 4 cents lower; pressure from firmer dollar index.
Wheat: 3 to 5 cents lower; record Aussie wheat crop.
Soybeans: 1 to 2 cents higher; fresh demand news.
Meal: Mixed; spreading with soyoil.
Soyoil: 10 to 20 points higher; support from soybeans, crude oil.
Corn and wheat futures were weaker overnight on strength in the U.S. dollar index, while soybeans saw light followthrough from yesterday's strong gains. The U.S. dollar index is firmer this morning after Moody's downgraded credit ratings for six European countries and said ratings may be cut for three others.
A high-range close in soybean futures today would be a positive technical sign after futures posted fresh yearly highs yesterday. Early support is expected to come from ongoing concerns about the South American crop, as hot, dry weather is stressing pod-filling soybeans across Rio Grande do Sul and southern Parana. Meanwhile, favorable weather is accelerating harvest in northern Parana and Mato Grosso.
Also this morning, USDA announced 283,000 metric tons (MT) of soybean sales to unknown destinations, with 215,000 MT for this marketing year and 68,000 MT for 2012-13. The sales are rumored to be for China.
NOPA soybean crush for January came in at 142.813 million bu., which was lighter than expected and 1.3% below year-ago. Soyoil stocks were higher than expected at 2.098 billion pounds. The negative crush numbers could temper buying interest in soybean and soyoil futures.
Wheat futures should be pressured this morning after the Australian Bureau of Agricultural and Resource Economics and Sciences raised its 2011-12 wheat crop estimate to a record of 29.5 million MT and exports to a record 22.3 million MT.
** OPENING LIVESTOCK CALLS **
Live cattle: Steady to firmer; light followthrough buying.
Feeder cattle: Steady to firmer; spillover from live cattle.
Lean hogs: Mixed; buying limited by sluggish demand for cash hogs.
Live cattle futures are expected to see light followthrough buying after yesterday's sharp gains. Traders, however, are cautious about pushing futures too far too fast this early in the week as they wait on clearer direction from the cash market. This week's cattle showlist is down substantially from last week, signaling feedlots are current, but also giving feedlots more bargaining power. Boxed beef prices were firmer yesterday, but will need to keep strengthening to raise hopes for steady to higher cash cattle prices in the Plains.
Meanwhile, the cash hog market is expected to be steady to weaker amid lackluster demand as packers work to improve margins. Packers say supplies are secured well into the week and they are planning on a smaller Saturday kill as long as margins remain in the red. Pork cutout values firmed slightly yesterday, but much more seasonal strength is needed to turn the cash market around.
Outside markets signal it will be a "risk off" day in the commodity markets, as the U.S. dollar index is stronger after Moody's rating agency downgraded credit ratings for six European countries late yesterday and warned ratings may be cut for three others.
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*Disclaimer: The information in the Market Commentaries was obtained from sources believed to be reliable, but we do not guarantee its accuracy. Neither the information nor any opinion expressed therein constitutes a solicitation of the purchase or sale of any futures or options contracts.
