Grains Choppy Overnight Amid Position Squaring

March 21, 2012 01:46 AM

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Overnight highlights. Following are highlights of overnight trade:

Corn: Mixed. Nearbys are 3 to 4 cents lower in late overnight trade, with deferred futures mixed. The U.S. dollar index is slightly weaker this morning, but without fresh demand news, there's little interest in buying corn due to expectations of plentiful acreage this spring and recent rains across the western Corn Belt recharging soils. According to Chinese customs data, corn imports in February of 520,671 metric tons (MT) were up significantly from year-ago.

Soybeans: Steady to 3 cents higher. Futures enjoyed light short-covering overnight, as the oversold condition has been corrected and outside markets have a positive posture this morning. While concerns continue to circulate about the size of this year's South American bean crop, harvest has begun and the window on U.S. exports is closing. But if there are any shipping delays, end users will return to the U.S. -- the globe's most reliable supplier. According to official Chinese customs data, Chinese bean imports in February of 3.83 million MT were up 65% from the previous year, but down 17% from January.

Wheat: 2 to 3 cents lower. Futures were weaker overnight despite slightly positive outside markets, as there's little fresh news for the market to digest and rains across the Plains make traders more optimistic about hard red winter wheat crop prospects. Wheat has returned to a follower's role. According to Chinese customs data, wheat imports in February of 372,262 MT were more than triple the year-ago level.

Live cattle: Mixed. Futures are expected to be mixed, with some short-covering possible. April live cattle are trading at around a $2 discount to last week's cash trade and traders should begin to more aggressively even positions ahead of Friday afternoon's Cattle on Feed Report. The report is expected to show On Feed at 102.3%, Placements at 102.7% and Marketings at 99.5% of year-ago levels -- reminding the market of the tightening supply situation.

Lean Hogs: Steady to lower. Futures are expected to see followthrough from yesterday's losses, as well as pressure from weakness in the pork cutout market. Pork cutout values slipped $1.58 yesterday to further widen packers' negative profit margins. As a result, the cash hog market is expected to be weaker again today. Pressure should be limited by the discount nearbys hold to the cash index, but April hogs did serious chart damage yesterday by violating support at the December low of $85.50.


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