Chinese Rumors Lift Corn

June 14, 2012 01:19 AM

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Overnight highlights. Following are highlights of overnight trade (as of 6:15 a.m. CT) and opening livestock calls:

Corn: 6 to 7 cent higher. Futures are enjoying followthrough buying this morning on rumors of Chinese interest in U.S. supplies and bulls are hopeful sales announcements will come shortly. But new-crop corn has a lot of work to do in order to improve the technical situation, as December corn remains in the lower half of the two-month choppy consolidation range.

Soybeans: 4 to 10 cents lower. Futures are weaker this morning on chances of rain across the Corn Belt, although coverage is now in question. Otherwise, there's little fresh news for the market to digest this morning as traders await the weekly export sales data. Traders of course have this week's S&D Report on their minds, which reminded them of the tightening supply situation.

Wheat: 3 to 4 cents higher. Futures are enjoying spillover from corn this morning, as well as some production concerns overseas. Meanwhile, country basis levels are improving, which signals the heaviest of hedge-related pressure may be behind the market.

Live cattle: Mixed. Futures are expected to be mixed following yesterday's sharp losses, with some short-covering possible on ideas the downside has been overdone. Traders yesterday reacted to news of $119 cash cattle trade beginning in Kansas, which is down $3 from the previous week. Nearby futures are trading at around a $2 discount to the cash market, which should limit followthrough pressure this morning.

Lean Hogs: Mixed. Futures are called to open mixed as traders have a cautious attitude about packers' profit margins and reevaluate positions. But bulls currently hold the near-term momentum, as technicals have improved. Pork cutout values improved 93 cents yesterday, but cash bids have risen at a faster pace. The result is packers' margins slipping deeper into the red, which raises concern about packer demand for hogs.


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