Grains Firmer Overnight on Dollar Weakness

September 21, 2012 01:29 AM

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Overnight highlights. Following are highlights of overnight trade (as of 6:30 a.m. CT) and opening livestock calls:

Corn: 3 to 5 cents higher. Corn futures are enjoying slight short-covering gains on help from a weaker U.S. dollar index. Otherwise, there's little fresh news for the market to digest, with upside potential being limited by active harvest progress which is weighing on the cash market. Focus will be on position squaring ahead of the weekend.

Soybeans: 5 to 7 cents higher. Futures are benefiting from short-covering ahead of the weekend, with support also coming from dollar weakness. Meanwhile, active harvest is weighing on the cash market and limiting upside potential. Official customs data from China signals soybean imports declined 1% in August from a year earlier to 4.42 million metric tons, but year-to-date imports are still up 17.4% from the same period last year.

Wheat: 5 to 11 cents higher. Wheat futures are seeing a light on spillover from neighboring pits, as well as weather worries. Dry conditions in the Southern Plains is delaying planting and raising concerns about acreage. The extended weather outlook calls for warmer and drier conditions to maintain the drought across the region the remainder of the year.

Live cattle: Mixed. Futures are expected to be mixed as traders wait on active cash cattle trade to begin. Steady to weaker cash trade began yesterday, but other feedlots say they are holding out for higher prices given ongoing strength in the beef market. October live cattle are trading at a slight premium to the start of this week's cash trade, although some short-covering is expected ahead of this afternoon's Cattle on Feed Report. The report is expected to show a tightening feedlot situation.

Lean hogs: Steady to firmer. Futures are expected to see a lift from strength in the pork cutout market, as values firmed $1.89 yesterday to lift packers' profit margins. Cash bids are expected to be steady to firmer this morning as some packers are still in need of supplies for a large Saturday kill and say marketings have tightened. This signals the worst is behind in terms of sow liquidation, which is supportive for futures.


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