Grains Lifted By Dry South American Forecast

06:40AM Dec 19, 2011
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Overnight highlights. Following are highlights of overnight trade and opening calls:

Corn: 7 to 11 cents higher. Futures were lifted overnight by spillover from soybeans and mostly dry conditions over South America. Central Brazil saw some scattered showers, but most of the region remained dry and a similar pattern is in place for this week. The U.S. dollar index is weakening after trading firmer earlier, which is also supportive this morning (is that dollar pattern holds).

Soybeans: 15 to 16 cents higher. Futures were stronger overnight on help from ongoing dry weather conditions in South America. Much of the region's soybean-producing region is in need of a shower, but mostly dry weekend conditions maintained stress on the developing crop. After a solid and early start for the crop, soybeans now need a timely shower and there's isn't much rain in the near-term forecast..

Wheat: 8 to 10 cents higher. Wheat was boosted by neighboring pits, as outside markets are not decidedly positive. If the U.S. dollar index continues to soften into this morning's open, it would give wheat a boost. But the U.S. stock market is expected to be weaker after Asian markets softened overnight in reaction to the death of the North Korean dictator, as well as ongoing uncertainty in the euro-zone.

Live cattle Steady to lower. Friday's Cattle on Feed Report showed On Feed about as expected at 104% of year-ago levels, but Placements at 104% and Marketings at 100% of year-ago came in above expectations. The higher-than-expected Placements figure is expected to weigh on futures this morning, although calf supplies are tightening, which is supportive for deferred-month futures. Meanwhile, nearby futures are trading in line with last week's $118 to $199 cash cattle trade.

Lean Hogs: Steady to lower. Packers are enjoying profitable margins, but saw those trimmed after pork cutout slipped $1.48 on Friday. Packers say this week's needs have largely been booked and traders are concerned lots are backing up, as dressed hog weights increased a pound last week and are now two pounds over year-ago. As a result, the cash market is expected to be steady to weaker to start the week.