Corn, soy pull back on harvest pressure
Corn futures closed lower on Tuesday. Corn futures declined shortly before closing bell after an impressive rally during the day session. Prices were pressured by the higher dollar index, corn harvest, and position squaring ahead of the October WASDE report. Crop harvest is expected to be 70 percent complete in this afternoon’s crop progress report. Also, pre report trade estimates peg the average production of the 2012 corn crop at 10.601 billion bushels, 126 million bushels below the September estimate. December corn closed ½ cents lower.
Soybeans futures closed mixed on Tuesday. Gains in the market were trimmed by strength in the U.S. dollar index, pre-WASDE position squaring, and harvest pressure. Soybean futures climbed by as much as 22 cents before declining 2 ½ cents below unchanged. Prices were supported early on by a combination of bargain buying, short covering and strength in the wheat market. However, pre report trade estimates forecast soybean production at 2.759 billion bushels with an average yield of 37.006; soybean harvest is expected to be 61 percent complete. November soybeans closed trading 2 ½ cents lower.
Wheat futures closed higher on Tuesday. Wheat future closed higher for the second consecutive day, bucking pressure from the higher dollar index and weakness in outside markets. Global supply worries were the predominant force driving market prices higher ahead of the October WASDE report. Poor growing conditions in Australia and Russia supported prices this morning as traders expect USDA to reduce global ending stocks further. Australian wheat production is projected to decline by more than one million tonnes while Russian output is only expected to reach 70 million tonnes. December wheat at CBOT is closed 3 ¾ cents higher; KCBT closed 6 cents higher; and MGE closed 3 ½ cents higher.
Live Cattle futures closed higher on Tuesday. Cattle futures sustained gains throughout the session as wholesale beef prices jumped sharply higher. Midday boxed beef prices were report $1.14 higher for choice and $1.51 for select cuts. Although packer margins remain in the red, margins have improved since yesterday and last week. Cash trade has yet to develop but prices are expected to be steady versus the previous week. October cattle closed $1.35 higher while December closed 33 cents higher.
Lean hog futures closed mostly higher on Tuesday. Lean hog futures rebounded from a mixed start to close firmly higher than the previous session. Futures moved higher at midday on short covering due, despite lower bids for cash hogs. It is suspected that demand has slowed slightly due to grocers buying more than enough pork for National Pork Month (October). However, seasonal demand as the holiday’s approach should limit losses and provide support over the next few weeks. Also, worth noting is the strength in deferred contracts with May and July contracts trading over $1 higher. Rising grain prices, recent herd liquidations and tight supplies worries supported deferred contracts on today. October closed 43 cents higher while December closed 8 cents lower.
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