Dollar Strength Pressures Grains Overnight

December 14, 2011 12:07 AM

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Overnight highlights. Following are highlights of overnight trade and opening calls:

Corn: 2 to 5 cents lower. Futures were pressured overnight by strength in the U.S. dollar index, as the euro-zone debt crisis remains unresolved. Front-month corn was firmer amid short-covering, but overall, commodity markets were negative as traders have a risk-off stance this morning.

Soybeans: 3 to 5 cents lower. Futures were weaker overnight amid negative outside markets. The U.S. Dollar index is stronger as traders perceive concerns overseas as more troubling, especially given the recent upbeat U.S. economic data. Traders have pushed aside dryness concerns in South America, but little in terms of meaningful precip are in the forecast, meaning some focus will remain on the crop.

Wheat: 1 to 2 cents lower. Without spillover from neighboring pits, wheat futures were vulnerable to weakness overnight amid dollar strength. Yesterday's Egyptian wheat purchase reminded the market U.S. wheat is not competitively priced on the global market. Also, a soggy near-term weather forecast for the Central and Southern Plains added to bearish attitudes yesterday.

Live cattle: Steady to firmer. Futures are expected to see a boost from strength in the beef market, although cash expectations are still varied. Choice beef values were 86 cents higher yesterday and Select rose a similar amount, but movement wasn't impressive at 112 loads for the day. Further beef improvement is needed to raise expectations of firmer cash cattle bids later in the week as this week's showlist is up slightly from last week.

Lean Hogs: Steady to firmer. Futures are expected to see a boost from some firmness in the cash market amid strong demand for hogs. Pork cutout values firmed 66 cents yesterday to return above $90-per-cwt. on very strong movement. This boost to packers' profit margins is keeping demand for cash hogs very strong. Some packers raised bids late yesterday to keep kill lines running as full as possible ahead of the holiday shortened schedules. Steady to firmer bids are possible again this morning.


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