Wheat Futures Narrow Discount to Corn

March 20, 2013 01:22 AM

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Overnight highlights. Following are opening grain and livestock calls at 6:23 a.m. CT:

A better "risk-of" atmosphere is being seen this morning as the U.S. dollar index is softer ahead of the Federal Reserve's upcoming statement on the economy later today. Investors will also be watching for developments out of Cyprus today after its parliament voted against a tax on bank deposits yesterday, calling a bailout deal into question. If Cyprus doesn't come up with a solution soon, investors will switch their tune to "risk-off."

Corn: 1 to 2 cents higher. Corn futures are stronger this morning on followthrough from yesterday's high-range close amid tight old-crop stocks. While demand news has been lackluster so far this week, May corn has returned above $7.30 for the first time since early February. If you are not current with our old-crop cash sales advice, the market is providing a good second chance to get something done.

Soybeans: 4 to 10 cents higher. Old-crop futures are leading gains this morning after futures slipped lower in late trade yesterday. March hasn't been kind to soybean market bulls as focus has shifted from transportation delays to unwinding of soybean-corn spreads. Old-crop beans could see one more push higher based on long lines at the ports, which could shift some demand to the U.S.

Wheat: 5 to 9 cents higher. May Chicago wheat futures have rallied this morning to trade in line with May corn futures. But if fresh demand news remains lackluster for the wheat market, this latest push higher will turn into a selling opportunity. Wheat needs constant demand news to keep bulls fed.

Live cattle: Steady to lower. Futures are expected to see followthrough from yesterday's losses as well as from weakness in the beef market. Choice beef values slipped $1.66 yesterday and Select softened just 6 cents on improved movement of 180 loads. Softer beef values suggest retailers were running into resistance from consumers because of higher prices. Cash cattle trade has not yet begun, but expectations are for steady to $1 lower trade due to this week's slightly larger showlist.

Lean hogs: Steady to lower. Lean hog futures are expected to see followthrough from yesterday's losses, as well as from weakness in the pork market. Pork cutout values slipped $1.14 yesterday to tighten packers' profit margins. As a result, the cash hog market is expected to soften, especially since road conditions have improved across the Midwest and producers are catching up on marketings.


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