All Eyes to the Sky -- Watching the Weather

June 15, 2012 01:27 AM

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Overnight highlights. Following are highlights of overnight trade (as of 6:30 a.m. CT) and opening livestock calls:

Corn: Mixed. Futures are mixed this morning, with nearbys marginally to a penny higher on weakness in the U.S. dollar index. Traders are also keeping a very close eye on the weather, as the weekend rain event isn't expected to be as significant as once thought. The system is breaking up as it moves eastward, which could result in a choppy day of trade as traders even positions ahead of the weekend.

Soybeans: 7 to 11 cents higher. Futures are seeing a lift this morning from weather concerns. Earlier this week, traders took some weather premium out of the market due to forecasts for heavy, widespread Midwest rains. But the system now isn't expected to be as significant and drought spread this week. Positive outside markets are also providing a lift.

Wheat: Mostly weaker. Futures are mostly weaker this morning, with pressure limited by yesterday's news of a SRW wheat sale to China, as well as concerns about the global crop being trimmed further due to volatile weather. Meanwhile, harvest is around 75% complete in Kansas and basis firmed this week -- signaling the worst of the hedge-related pressure is behind the market.

Live cattle: Mixed. Following yesterday's losses, futures are due for short-covering as traders even positions heading into the weekend. The source of much of the pressure has been weaker cash cattle trade, signaling demand has softened. But meanwhile, the beef market has held strong. Choice values were 41 cents higher yesterday to trade above $198-per-cwt. on strong movement of 257 loads. This should provide some encouragement to cover newly established short positions.

Lean Hogs: Steady to higher. Futures are expected to see a lift from strength in the pork cutout market. Values rose $2.35 yesterday to trim packers' losses. The cash hog market is expected to be steady to higher again today amid tightening supplies. There is still concern about packers' negative margins, but for the timebeing, attitudes are bullish in the hog pit.


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