Grains Lifed by Short-Covering Overnight

June 4, 2012 01:36 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: 11 to 13 cents higher. Futures were lifted by weakness in the U.S. dollar index as well as continued strength in the cash market. But the market has a lot of work to do in order to signal a near-term low has been posted. Weather concerns will also be on traders' minds this week, as the forecast is for warmer and drier conditions, although some rains over the weekend will help sustain the crops. Traders look for an uptick in crop condition ratings this afternoon after rains were seen across a large area of the Corn Belt last week.

Soybeans: 7 to 13 cents higher. Futures were lifted overnight by weakness in the U.S. Dollar index and ideas last week's losses were overdone. But without fresh demand news gains will be hard fought unless focus returns to the weather, which is expected to be warmer and drier this week. USDA will release their first soybean crop condition report of the season this afternoon, which should show the crop off to a favorable start.

Wheat: 4 to 11 cents higher. Futures were lifted by short-covering overnight following Friday's sharp plunge. But gains were limited to short-covering as traders view world weather as stabilized and harvest is progressing in the Southern Plains thanks to drier weather. The rise of new-crop supplies on the market will limit gains unless there's a fresh source of support from outside markets or in by demand news.

Live cattle: Mixed. Futures are expected to see a mixed start, with pressure limited by the discount nearbys hold to the cash market. Cash cattle trade largely took place at $121 last week, which is steady with the previous week. Boxed beef values were weaker on Friday, but were higher for the week on improved movement. Traders will be gauging the beef market closely again this week for grilling season indications.

Lean Hogs: Mixed. Futures are expected to see a mixed start today, with upside potential limited by expected weakness in the U.S. stock market. Meanwhile, pork cutout values still suggest a near-term low has been posted, with values up 44 cents on Friday. But packers' profit margins have slipped further into the red as some locations raised bids late last week. As a result, most bids are expected to be steady to weaker today.


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