Dollar Weakness Lifts Grains Overnight

November 19, 2012 12:23 AM
 

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Overnight highlights. Following are highlights of overnight trade (as of 6:25 a.m. CT) and opening livestock calls:

Corn: 5 to 6 cents higher. Futures are seeing spillover from soybeans, help from a weaker U.S. dollar index and delays at Brazil's ports due to congestion, which has improved demand for U.S. corn. Export sources say as much as 1.5 MMT of corn from Brazil has been delayed, which the bulk to Asian buyers.

Soybeans: 10 to 14 cents higher. Futures are seeing a lift from weakness in the U.S. dollar index, as well as short-covering on ideas last week's losses were overdone. But soybeans have a lot of work ahead to improve the technicals of the market. Meanwhile, China says it will temporarily suspend auctions of soybeans from state reserves this week as it starts to stockpile new-crop soybeans.

Wheat: 2 to 4 cents higher. Wheat is seeing a boost from neighboring pits and weakness in the dollar, as there's little other fresh news for the market to digest. Traders are noting the tight supply situation in the Black Sea region, although this demand hasn't shifted to the U.S. as importers seek other more cost-competitive supplies.

Live cattle: Steady to firmer. Friday's Cattle on Feed Report came in about as expected, which is supportive for deferred futures as it reflects a tightening supply situation. Light cash cattle trade was reported after the report at mostly steady prices in Texas but steady to $1 higher in Kansas. With the bulk of this week's cash cattle trade between $125 and $126 and December live cattle trading in line with the cash market, traders will turn their attention to the boxed beef market to start the week for cash clues.

Lean hogs: Steady to firmer. Futures are expected to see a lift from the pork cutout market, which firmed 93 cents on Friday to lift packers' profit margins. But demand for cash hogs will be variable to start the week. Packers' demand for hogs is limited due to the holiday, but they will want to keep kill lines running as full as possible due to profitable margins. Cash bids are expected to be mostly steady to start the week.


 

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