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Traders Await COF Report

April 20, 2012
By: Julianne Johnston, Pro Farmer Digital Managing Editor

Follow me on twitter @julijohnston

Overnight highlights. Following are highlights of overnight trade:

Corn: 1 to 4 cents higher. Futures were supported overnight by followthrough from yesterday's gains, weakness in the U.S. dollar index and indications China is buying U.S. corn. Technically, the market has recouped nearly all of this week's losses to suggest a near-term low has been posted. Focus this week has also been on bull spread unwinding, although nearbys led gains overnight.

Soybeans: 3 to 6 cents higher. Futures were lifted overnight by dollar weakness, concerns about the South American crop and demand. A poor finish to the crops in Brazil and Argentina have traders looking for China to continue favoring U.S. supplies. Also supportive are indications China will further ease its monetary policy, making it easier for importers to get lines of credit to make purchases.

Wheat: Mixed. Futures were choppy overnight, with buying limited to short-covering on ideas the global crop will be plentiful. As a result, wheat needs to remain competitively priced on the global market. But if corn and soybean futures extend early gains, wheat's gains could build through the day.

Live cattle: Higher. Futures are expected to be higher on this week's strong improvement in beef values as well as traders evening positions ahead of this afternoon's Cattle on Feed Report. Choice values were up another $1.32 yesterday, with Select up 87 cents. This week's cash trade has largely been steady with the previous week, with some feedlots holding out for higher prices. Traders expected the COF Report to show On Feed at 102%, Placement sat 92.3% and Marketings at 94.5% of year-ago levels -- reflecting a tightening supply situation.

Lean Hogs: Higher. Futures are called to open higher on spillover from expected strength in the U.S. stock market and from yesterday's 93-cent improvement in the pork cutout market. But further pork gains are needed to lift packers' profit margins out of the red. As a result, the cash hog market is expected to be mostly steady today amid limited demand. Cash sources say demand for hogs could improve next week as supplies are tightening.


 

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