Corn & Wheat Futures Anticipate Bearish Report Data

March 29, 2012 01:27 AM

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Overnight highlights. Following are highlights of overnight trade:

Corn: Mixed. Old-crop futures are mostly around 3 cents lower overnight, with new-crop up marginally on short-covering following yesterday's sharp decline. Funds have been aggressively sellers of corn heading into USDA's Prospective Planting and Grain Stocks Reports. The market certainly has a lot of bearishness factored in ahead of the report, therefore, it would take a big acreage figure to add to bearish momentum. Focus today will be on position squaring ahead of the key Friday morning reports.

Soybeans: 1 to 2 cents higher. Futures are marking time this week, but the uptrend remains well intact. Ongoing concerns with the South American crop -- with many saying yields are coming in even worse than expected as harvest rapidly progresses -- are raising demand expectations for U.S. soybeans. As a result, new-crop futures are working aggressively to buy additional acres. Fund buying overnight was limited by negative outside markets, with a firmer U.S. dollar resulting in pressure on crude oil and gold futures.

Wheat: Mixed. Futures are narrowly mixed this morning, with old-crop futures marginally higher. Traders ignored positive demand news yesterday, instead focused on expectations for plentiful U.S. supplies in the year ahead due to the increase in acreage and improved weather conditions. Wheat futures are hovering above important support levels, and if broken, would open fresh downside risk. Traders have bearish USDA reports factored into the market.

Live cattle: Lower. Futures are called lower in reaction to continued weakness in the beef market. Choice beef values slipped $1.20 yesterday and Select declined $1.06. Interestingly, Choice values are now 8 cents below Select. This happens at times of slowed demand, which raises concerns about grilling season given high gasoline prices. Traders are still waiting on cash cattle trade to begin in the Southern Plains after early week trade at $126 to $127 was reported -- coming in a dollar below last week.

Lean Hogs: Lower. Futures are due for a corrective rally, but are called lower on weakness in the cash market and as traders begin to more aggressively even positions ahead of Friday afternoon's Hogs & Pigs Report. Traders expect the report to reflect expansion of between 1% to 2% in the industry. Meanwhile, traders are comfortable with April hogs trading at a discount to the cash index given continued weakness in the pork cutout market.


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