Grains Weaker on Dollar Strength, Lack of Fresh News

January 24, 2013 12:14 AM

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Overnight highlights. Following are opening grain and livestock calls at 6:15 a.m. CT:

Corn: 3 to 4 cent lower. Futures are seeing followthrough pressure after yesterday's low-range close, with additional pressure coming from slight strength in the dollar index. March corn futures are now trading around 18 cents off Tuesday's high amid profit-taking. Additional pressure is coming from forecasts for better rains in Argentina, as there's little other fresh news for the markets to digest. Traders will have to wait until tomorrow for the weekly export sales data, as it has been delayed due to Monday's government holiday.

Soybeans: 7 to 13 cents lower. Futures are weaker on followthrough from yesterday's losses, as well as strength in the dollar index and forecasts for rains in central Argentina early next week. Otherwise, there's little other fresh news for the markets to digest and traders anticipate demand for U.S. soybeans will slow in the near-term as Brazilian supplies become more readily available next months.

Wheat: 2 to 4 cents lower. Wheat is seeing spillover from neighboring pits, as well as pressure from a firmer dollar index this morning. But downside risk is being limited by dryness in the U.S. Southern Plains. But buying from the weather is limited right now, as the crop is in dormancy. Wheat needs a dose of fresh export news to lift bulls' spirits.

Live cattle: Mixed. Futures firmed into the close yesterday despite news that cash cattle trade had begun in Texas and Kansas at $122, which is down $3 from last week. February live cattle are trading in line with last week's cash trade, which opens the door to fresh selling. But the tightening supply situation and the fact futures remain oversold could help to limit selling, especially as traders turn their focus to evening positions ahead of tomorrow afternoon's Cattle on Feed Report.

Lean hogs: Mixed. Futures are expected to be mixed today amid varied demand for cash hogs. February hog futures are trading at around a dollar discount to the cash index, which should help limit downside risk. Meanwhile, the cash hog market is expected to be mostly steady today as packers work to improve profit margins. Pork cutout values firmed 22 cents yesterday, but movement was light at 43.8 loads changing hands.


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