Euro-Zone Worries Pressure Soybeans and Wheat

May 30, 2012 01:24 AM

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Overnight highlights. Following are highlights of overnight trade (as of 6:30 a.m. CT) and opening livestock calls:

Corn: Marginally higher. Futures were supported overnight by the slip in the condition of the crop, which raises concerns about early establishment. There is rain in the forecast for the Corn Belt the remainder of the week, but rains are much-needed as the forecast is warmer and drier for next week.

Soybeans: 4 to 1 cents lower. Futures were pressured overnight by negative outside markets. the U.S. dollar index is stronger this morning on stepped-up euro-zone worries. The European Central Bank issued a statement this morning saying it had not approved a bailout for Bankia, the No. 4 bank in Spain. Additionally, yields on 10-year Spanish debt soared to its highest level since late November. This signals a "risk-off" attitude is ahead the remainder of the day.

Wheat: 4 to 8 cents lower. Futures were pressured overnight by negative outside markets and harvest progress. While yesterday's condition ratings showed further deterioration, seasonal pressure on the market is beginning to mount. July Chicago wheat slipped back below the important triple-top of $6.55 1/2 overnight, strongly suggesting a high has been posted.

Live cattle: Steady to higher. Futures are expected to see a lift from the strong start to the beef market for the week. Choice values rose $1.11 and Select was up $1.74 yesterday, with movement strong at 171 loads. On top of that, this week's showlist is smaller, which raises cash expectations.

Lean Hogs: Steady to higher. Futures are expected to be supported this morning by improving packer profit margins. While still in the red, packers' margins improved yesterday as pork cutout values rose 86 cents to start the week and movement was very strong at 115 loads changing hands. This signals weekend pork clearance was strong, which traders believe will lead to continued pork features.


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