Heightened Euro-Zone Concerns Lift Dollar

September 19, 2011 01:48 AM

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Overnight highlights.

Following are highlights of overnight trade and opening calls:

Corn: 4 to 6 cents lower. Strength in the U.S. dollar index pressured grain futures overnight, as global economic concerns remain on traders' minds. Gold futures were higher, signaling traders are seeking safe haven buys, away from riskier commodities. However, this is also talk brewing that cheaper priced U.S. corn is attractive to Chinese buyers, given tight supplies ahead of their harvest.

Soybeans: 8 to 10 cents lower. Futures were lower overnight amid widespread commodity selling to do more near-term technical chart damage. With little fresh positive news for the market to digest, traders are lightening their long exposure to the soybean market. Traders will be gauging this afternoon's Crop Condition Report to signs of last week's frost/freeze damage.

Wheat: 7 to 8 cents lower. Futures are in a follower's role, seeing spillover from neighboring pits overnight. Strength in the U.S. Dollar after global stock markets weakened overnight led to weakness in commodities overnight. With more technical chart damage done, bears clearly hold the near-term advantage.

Live cattle: Mixed. Futures are expected to be mixed on some short-covering, but upside potential will be limited by negative outside markets. Cash cattle trade was light last week at mostly steady priced paid compared to the previous week. Packers weren't willing to bid up despite tighter market-ready supplies due to tightening profit margins. Given that some cattle were carried over to this week, key will be if the boxed beef market strengthens.

Lean Hogs: Mixed. Futures are expected to be mixed amid spreading, with upside potential for nearbys limited by negative outside markets amid global economic concerns. The cash hog market is expected to be steady to firmer this morning as packers are still working on securing this week's needs and margins are profitable. Key to building on cash improvement is if the pork cutout market continues to improve.

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