Bull Spreading Dominate in Corn and Soybean Futures

April 27, 2012 01:35 AM

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Overnight highlights. Following are highlights of overnight trade:

Corn: Mixed. Old-crop futures led gains overnight, trading 1 to 6 cents higher, while deferred futures were marginally lower. Bull spreading turned active yesterday on rumors of more Chinese buying, improved Gulf basis levels and concerns about tight old-crop stocks. The International Grain Council says China's corn imports may rise 50% to around 6 million metric tons next marketing year due to strong demand.

Soybeans: 5 to 11 cents higher. Futures were stronger overnight, with old-crop leading the way on strong demand and concerns about the South American crop. Lower crop estimates from Argentina continue to float around the market due to the poor finish to the crop. May beans rose to a fresh contract high overnight -- knocking on the door of $15.00.

Wheat: Marginally to 2 cents higher. Futures are seeing spillover from neighboring pits, as well as short-covering. Much of the gains are on ideas losses are overdone. There are also concerns about the condition of the U.S. winter wheat crop due to forecasts for cold weekend temps. Temps over the weekend will be watched closely.

Live cattle: Steady to firmer. Futures are expected to be firmer after yesterday's losses and on support from the beef market. Beef values have posted strong gains over the last two weeks, with Choice beef values up another 25 cents yesterday and Select was down 4 cents on solid movement of 162 loads yesterday. Cash cattle trade picked up at $119 yesterday in Texas, with June cattle trading at around $7 discount to the cash market. Traders should view recent losses as overdone and cover short positions ahead of the weekend.

Lean Hogs: Steady to weaker. Futures are expected to be steady to weaker on continued concerns about pork demand and the cash market. Pork cutout values slipped another 12 cents yesterday -- continuing the slow bleed seen so far this year. Packers' profit margins remain well in the red, and the cash market is expected to be steady to weaker again today. Nearby hogs are trading at a steep discount to the cash index and the flip of the calendar to May next week will put more focus on narrowing this spread.


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