Dollar Strength Weighs on Grains Overnight

May 2, 2012 01:43 AM
 

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Overnight highlights. Following are highlights of overnight trade:

Corn: 2 to 4 cents lower. Futures were pressured overnight by a strengthening U.S. dollar index, which was bolstered by headlines about the euro-zone slipping deeper into recession. There are now 13 of the 27-nation euro-zone struggling with double-digit unemployment, led by 24.1% in Spain and 21.7% in Greece. Talk that Germany could be the next nation to see its economy shrink is adding to the euro-zone concerns.

Soybeans: 7 to 9 cents lower. Soybeans also faced profit-taking pressure overnight from dollar strength. Gold futures are seeing sharp pressure this morning, which is adding to weakness in the grain markets overnight. July soybean futures are consolidating around $15.00, with the market pausing around that level to gain momentum for the next trending move. Futures have posted high-range closes so far this week, so today's close will be telling.

Wheat: 6 to 8 cents lower. Futures remain in a follower's role, with pressure coming from dollar strength and spillover from neighboring pits. Traders are also keeping track of results from the HRW wheat tour. Day 1 results from the tour showed a yield of 53.6 bu. per acre, beating last year's first day tour result of 40 Bu per acre.

Live cattle: Mixed. Futures are expected to be mixed today, as traders gauge outside markets after yesterday's surge in the U.S. stock market. The beef market is lackluster to start the week, with Choice values up 7 cents yesterday and Select up 52 cents on decent movement of 190 loads. Very light cash cattle trade was reported in Nebraska yesterday at $1 to $2 below last week, but other feedlots say they are holding out for higher prices as packers' profit margins have returned to the black and showlists have tightened.

Lean Hogs: Steady to weaker. Futures are expected to be weaker based on concerns about the cash market, as pork cutout values slipped 18 cents yesterday to keep packers' profit margins in the red. The cash hog market is expected to be steady to weaker again today amid limited demand.


 

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