Grains Pressured by Dollar Strength Overnight

February 7, 2012 12:44 AM

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Overnight highlights. Following are highlights of overnight trade and opening calls:

Corn: 3 to 5 cents lower. Futures softened overnight, but March held above support at yesterday's low of $6.39 1/4. Strength in the dollar weighed on the grain markets overnight, although pressure was limited as traders begin to more actively even positions ahead of USDA's Thursday Supply & Demand Report. Investors are on edge as they wait for Greece to discuss additional austerity measures today.

Soybeans: 3 to 5 cents lower. Futures saw two-sided trade overnight, but are fading late amid dollar strength. March beans are pivoting around support at yesterday's. Rains in the forecast this week are expected to reach areas that missed out on showers over the weekend, but production concerns remain as Brazilian consultant group Celeres cut its forecast for the country's crop by around 2 million metric tons (MMT) to 72.04 MMT.

Wheat: 7 to 9 cents lower. Futures were softer overnight amid dollar strength, with pressure limited by concerns about frigid temps in northern Europe and the Former Soviet Union. Estimates of crop damage in Ukraine continue to be large, as crop watchers remind it was seeded in dry soils and emergence was also poor. Private consulting firm UkrAgroConsult cut its Ukraine wheat crop forecast to 13.7 MMT from 45 MMT previously.

Live cattle: Steady to firmer. Futures are expected to be supported by a strong start to the week in the boxed beef market. Choice beef values were up $1.54 and Select rose 99 cents yesterday on strong movement of 197 loads. Higher beef values are raising expectations of a near-term low being in place, as traders' expectations for this week's cash market is steady to firmer. Cash sources, however, will counter this week's showlist is higher than last week.

Lean Hogs: Mixed. Futures are expected to be mixed, with upside potential limited by lackluster demand for cash supplies. Pork cutout values slipped 35 cents yesterday to keep packers' profit margins in the red. Traders are disappointed a seasonal increase in pork buying hasn't started yet, but in the meantime hog supplies are tightening somewhat.


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