Dollar Strength Weighs on Grain Futures

August 18, 2011 01:24 AM

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

Corn: 4 to 8 cents lower. Futures saw profit-taking in overnight trade, largely inspired by strength in the U.S. dollar index. Pressure was limited by ongoing crop concerns, as reports of crops being pushed to maturity continue to lower expectations about this year's yields. Next week we'll have more ground truth to go by when the Pro Farmer Midwest Crop Tour begins sampling.

Soybeans: 7 to 9 cents lower. Futures saw profit-taking in overnight trade following yesterday's strong double-digit gains. Strength in the U.S. Dollar index caused traders to reduce risk. Futures were supported yesterday by forecasts for warmer and drier weather next week, as well as this week's rain forecast turning more spotty.

Wheat: 13 to 15 cents lower. Futures saw profit-taking in overnight trade following yesterday's gains. Strength in the U.S. Dollar pressured wheat overnight. Futures have seen recent support from heightened talk about the spring wheat crop following the release of certified acres by USDA's FSA. That data signaled Prevent Plant was even more significant than expected.

Live cattle: Mixed. Futures are expected to be mixed as traders wait on cash trade to begin. Limited trade at steady prices was reported in Nebraska yesterday. If futures are lower again today, it would take the wind out of bulls' sails for higher cash trade this week. Still, the boxed beef market continues to trend higher and this week's showlist is smaller, which gives feedlots some bargaining power.

Lean hogs: Steady to weaker. Futures are expected to favor a downside bias due to weakness in the cash hog market as supplies are gradually building. Pork cutout values were steady yesterday, which is helping to improve packers' profit margins. Downside risk in futures should be limited by the big discount nearby futures hold to the cash index.


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