Grains Face Profit-Taking Overnight

May 11, 2012 01:26 AM
 

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Overnight highlights. Following are highlights of overnight trade:

Corn: 2 to 5 cents lower. Futures saw followthrough pressure overnight after yesterday's losses as traders continue to react to the higher-than-expected old- and new-crop carryover pegs by USDA. Also negative for the market this morning are outside markets, as reported large losses by JPMorgan Chase have rattled the nerves of investors. The U.S. dollar index has returned above 80.000, which is weighing on crude oil and gold this morning.

Soybeans: 10 to 20 cents lower. USDA delivered bullish data to the soybean market yesterday, as it tightened 2011-12 carryover more than expected and sees stocks tightening more yet in the upcoming marketing year. But profit-taking entered the market overnight thanks to negative outside markets.

Wheat: 1 to 3 cents lower. Futures saw spillover from neighboring pits overnight, as well as pressure from strength in the U.S. dollar index as traders' confidence is shook from JPMorgan Chase news and ongoing concerns surrounding the future of the euro-zone given Greece's political worries. Yesterday's data from USDA was overall positive for the wheat market, as it sees U.S. carryover tightening somewhat in 2012-13 compared to this year. But overall, global stocks remain plentiful, keeping wheat in a follower's role.

Live cattle: Steady to weaker. Futures are expected to be weaker today as cash opinions have softened. Choice beef values dropped $1.59 yesterday and Select fell $2.09 -- lowering traders' cash opinions. Also negative for live cattle futures today is expected spillover from outside markets, as the U.S. Dollar index is stronger and the stock market is expected to begin the day under pressure on reported large losses by banking giant JPMorgan Chase.

Lean Hogs: Steady to firmer. Something important happened yesterday -- packers' profit margins returned to the black thanks to a $1.96 surge in pork cutout values. Now the key is keeping the pork cutout market on an upward track to improve demand for cash hogs. Cash bids firmed in some locations yesterday, with steady to firmer bids a possibility again today. But packers will be cautious about raising bids too much, as they are finally glad to have margins back in the black after working in the red for an extended period.


 

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