Dollar Strengthens as Japan Intervenes

October 31, 2011 01:38 AM
 

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

Corn: 6 to 10 cents lower. Futures were weaker overnight amid dollar strength. Japan stepped in to weaken the yen after it climbed to a post-World War II high against the dollar. The U.S. dollar index remains in the recent downtrend, but is challenging trendline resistance. December corn remains in the two-week choppy consolidation range.

Soybeans: 10 to 12 cents lower. Futures were weaker overnight in reaction to sharp dollar strength. Traders will also be moving to the sidelines as they even positions at month's end. January beans are challenging support at the mid-month low of $12.07 1/2. A slip below this level would have bears targeting the October low of $11.63 1/2.

Wheat: 6 to 10 cents lower. Futures were weaker overnight due to strength in the dollar index and spillover from neighboring pits. Wheat needs a dose of fresh demand news to re-interest bulls as it's in a follower's role. If widespread commodity selling is seen today due to dollar strength, stepped up pressure will likely be seen in the wheat pit.

Live cattle: Steady to lower. Futures are expected to be weaker this morning due to spillover from expected weakness in the U.S. stock market as investors react to Japan's intervention in the global currency markets. Traders will be keeping a close eye on the boxed beef market this week for cash clues, but as seen last week, packers are working to improve profit margins, which raises the likelihood of additional near-term cash weakness.

Lean Hogs: Steady to lower. Futures are expected to be weaker on spillover from widespread commodity selling due to strength in the dollar index. Traders also expect the cash hog market to be weaker this morning due to plentiful supplies. Packers say early week needs have been secured and they are having no difficulty attracting supplies.


 

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