Grains Setback on Western Corn Belt Rains

June 21, 2012 01:27 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: 6 to 8 cents lower. Futures are under pressure this morning on last night's western Corn Belt rain and from disappointment the Federal Reserve Open Market Committee didn't do more to stimulate the economy. There are also concerns about more signs of a global economic slowdown in China and Europe. Rains, however, have been disappointing as they cross the Mississippi River, raising concern about stress to the eastern Corn Belt crop.

Soybeans: 6 to 12 cents lower. Futures are under pressure this morning from yesterday's rain event across the western Corn Belt, although more rains are needed given soil moisture deficits and the system disappointing as it entered Illinois. According to Chinese customs data, soybean imports in May totaled 5.28 million metric tons, 16% higher than a year-ago. But preliminary manufacturing data from China fell to a seven-month low -- raising concern about sluggish demand.

Wheat: 4 to 5 cents lower. Futures are seeing light spillover from neighboring pits, as well as disappointment the Federal Reserve failed to deliver the hoped-for monetary stimulus. Traders, however, are noting concerns about dry weather in Russia and possible crop damage in Europe due to late-season rains. Wheat has moved into a follower's role to corn and soybeans.

Live cattle: Mixed. Futures are expected to be choppy as traders wait on cash cattle trade to begin and more actively even positions ahead of Friday afternoon's Cattle on Feed Report. Expected weakness in the U.S. stock market will limit buying in live cattle, as traders are disappointed by the Federal Reserve's limited action to stimulate the economy.

Lean Hogs: Mixed. Futures are expected to see a choppy start, with upside potential limited by yesterday's 39-cent drop in pork cutout values. But overall, the pork market is still up on the week to signal retailers favor it for featuring. Cash hog bids are expected to be mixed amid varied demand, as some locations say they have secured supplies due to scaled back demand.


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