Bull Spreading Dominates Corn Trade

06:23AM May 04, 2012
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Overnight highlights. Following are highlights of overnight trade:

Corn: Mixed. Futures were mixed overnight amid bull spreading, with nearbys up 2 to 4 cents amid tightening old-crop supplies. Meanwhile, new-crop futures were mostly around 1 to 2 cents lower overnight, as traders have a positive view toward new-crop potential due to the quick start to planting and recent rains renewing soil moisture in the Upper and western Corn Belt.

Soybeans: Mixed. Futures were mixed overnight, with old-crop futures up around 6 cents while new-crop was mixed. Following two sharp days of price pressure, a recovery today for July beans would give bulls some confidence the liquidation phase is over. The market needs a constant dose of positive news to keep bulls interested, and the previous two days, the market ignored that news as traders took profits. Futures are poised to post overall losses for the week unless gains are extended sharply today.

Wheat: 2 to 3 cents higher. Futures were stronger overnight despite strength in the U.S. dollar index, due to concerns about the hot and dry forecast for this weekend in the Southern Plains. Meanwhile, the Wheat Quality Council's HRW wheat tour estimated Kansas's average yield at 49.1 bu. per acre, putting production at 403.9 million Bu -- the highest in the last decade.

Live cattle: Steady to firmer. Futures were sharply to limit higher yesterday amid short-covering, as well as traders working to narrow the discount nearbys hold to the cash market. June live cattle are trading at around a $4 discount to the start of this week's cash cattle trade, which opens the door for more upside potential. Cash cattle trade picked up around $120 to $121 yesterday in Nebraska, although no active trade in the Southern Plains has been reported.

Lean Hogs: Steady. Futures enjoyed spillover from live cattle yesterday, and given ongoing weakness in the cash hog market, follothrough buying could be hard fought today. As a result, the market is expected to see a choppy start. Pork cutout values slipped 35 cents yesterday, keeping packers' profit margins in the red. Also important for livestock futures this morning is the jobs report, as it will set the tone in the closely watched U.S. stock market.