Grains Mixed on Midwest Rains and Positive Outside Markets

June 11, 2012 01:25 AM

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Overnight highlights. Following are highlights of overnight trade (as of 6:25 a.m. CT) and opening livestock calls:

Corn: Mostly 4 to 5 cents lower. Futures were mostly 4 to 5 cents lower overnight with the exception being the front-month July contract, which was firmer. New-crop futures were pressured by a rain event moving across the Corn Belt, although no significant totals were expected. Milder temps this week are seen as favorable for crop development. Positive outside markets could result in fresh buying once open outcry trade begins. According to Chinese customs data, corn imports in May of 3,615 metric tons (MT) were down from 27,491 MT a year ago and 18,459 MT in April.

Soybeans: 2 to 6 cents higher. Futures saw a boost overnight from positive outside markets, as the U.S. dollar index is sharply lower this morning as weekend financial developments were positive. Traders this morning are reacting to Spain's request to capitalize its troubled banks and data from China that signals inflation has eased -- signaling further stimulus measure could be coming. According to Chinese customs data, soybean imports in May of 5.28 million metric tons (MMT) were up 16% from a year-ago and 8% higher than last month and the highest of the year.

Wheat: 4 to 6 cents higher. Futures are seeing a boost this morning from positive outside markets. The U.S. Dollar index is currently trading well off its earlier low, but still remains under pressure. The U.S. stock market is expected to see a lift this morning after global markets firmed overnight in reaction to news Spain's $125 billion bank aid deal. Euro-zone finance ministers agreed this weekend to lend Spain up to 100 billion euros. Also supportive is the dry forecast for Russia's wheat areas, although harvest progress in the U.S. will limit buying to short-covering.

Live cattle: Steady to higher. Futures are expected to find support this morning from positive outside markets, as well as narrowing the discount nearbys hold to the cash market. Cash trade last week at $122 to $123 was up $1 from the previous week, but to build on that, beef values must continue to improve. With Choice values nearing the $200 level, bulls fear demand for beef will slow.

Lean Hogs: Steady to higher. Futures are expected to see a boost this morning from positive outside markets, as well as solid demand for cash hogs. Packers saw profit margins improve (although they remain well in the red) on a 94-cent gain in the pork cutout market Friday. Key to building demand for cash supplies this week will be if pork values can continue to firm.


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