Grain Markets Remain Concerned About Rain Prospects

July 13, 2012 01:25 AM

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Overnight highlights. Following are highlights of overnight trade (as of 6:20 a.m. CT) and opening livestock calls:

Corn: 8 to 12 cents higher. Futures are seeing a lift from concerns about the crop, as hot temps over the bulk of pollination and a lack of widespread rains has left yield is question. Scattered showers are moving across northern Iowa this morning (so far a 0.25 inch rain here in northern Grundy County), but weather models don't show very much rain across the Belt through the weekend. Key will be if traders opt to take some profits ahead of the weekend.

Soybeans: 14 to 24 cents higher. Futures are stronger this morning amid weather concerns, as soybeans are in dire need of a rain to support blooms and improve plant health. As noted in corn, there is some rain in the forecast and scattered showers are moving over northern Iowa, but the weekend forecast does not call for abundant rain. November beans are pivoting around $15.50 this morning.

Wheat: 8 to 10 cents higher. Wheat is mostly around a dime higher this morning on spillover from neighboring pits. Wheat has also seen a lift this week from global weather concerns, as crop troubles in Europe, Russia, Australia and China have raised expectations for U.S. export demand. But if corn faced profit-taking wheat will follow, as it largely remains in a follower's role to corn.

Live cattle: Steady to lower. Futures are expected to be pressured by followthrough from yesterday's losses, continued weakness in the beef market and lower cash cattle trade. Cash trade began in the Southern Plains at $115, but was picking up at $114 -- which is $3 lower than last week's trade. This week's larger showlist gave packers the upper hand in cash negotiations. Pressure could be limited by short-covering as traders even positions heading into the weekend.

Lean Hogs: Mixed. Futures are expected to be mixed, with nearbys expected to see followthrough from yesterdays gains. Strength in the corn market raises concerns about farrowing intentions, which should help to limit pressure on deferred futures. The cash hog market is expected to be steady to weaker amid light demand due to negative profit margins, although margins have improved this week. Pork cutout values slipped just 6 cents yesterday and movement was strong, raising expectations a near-term low was in the works.


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