Grain Markets in Need of Fresh News

April 12, 2012 01:28 AM

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Overnight highlights. Following are highlights of overnight trade:

Corn: Marginally to 1 cent higher. Futures benefited from light short-covering overnight on help from dollar weakness. Futures are consolidating around Tuesday's lows, but bullish enthusiasm was erased by this week's steady carryover peg by USDA. There was talk China was buying U.S. corn again yesterday, which helped to firm the market. Gulf basis has also improved. This morning's Weekly Export Sales Report needs to show an uptick in demand in order to encourage fresh buying interest.

Soybeans: 5 to 9 cents higher. Weakness in the U.S. dollar index spurred fresh buying in soybeans overnight. May beans have consolidated around $14.25 and remain in the uptrend. But with the contract nearing the contract high, buying has been limited as bulls are beginning to feel their upside objective has been met. It will take fresh news to keep bulls interested.

Wheat: 1 to 3 cents higher. Futures saw spillover from neighboring pits and help from the dollar index overnight. The longer-term outlook remains bearish for the market, as the general consensus is the global supply situation will remain plentiful through the coming year. Wheat is hovering above important support levels. If violated, it will open fresh downside risk.

Live cattle: Mixed. Futures are called to open mixed amid short-covering vs. concerns about the beef market. Choice beef values slipped $1.02 yesterday while Select rose 33 cents. The good news is movement has improved this week, with 364 loads changing hands. Nearby futures are trading at a discount to the start of this week's cash cattle trade, which could also spur some position squaring. Cash trade got underway in Kansas yesterday at $121 to $121 -- in line with last week's trade.

Lean Hogs: Mixed. Futures are expected to be mixed as traders are somewhat encouraged by improvement in packers' profit margins, although they remain in the red. Pork cutout values improved $1.64 yesterday, which is expected to help stabilize the cash hog market this morning. But demand for cash supplies is light as packers largely have this week's needs secured.


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