Light Profit-Taking in Grain Markets Overnight

March 16, 2012 01:28 AM

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Overnight highlights. Following are highlights of overnight trade:

Corn: 1 to 2 cents lower. Following yesterday's gains, futures faced light profit-taking overnight due to strength in the U.S. dollar index. Futures were supported yesterday by tightening old-crop stocks and help from positive outside markets. May corn saw trade above the December high of $6.72 1/2 yesterday, but needs to close above this level to open significant upside potential. Futures are currently poised to post strong weekly gains.

Soybeans: 2 to 3 cents lower. Futures saw light profit-taking overnight due to strength in the U.S. dollar index after surging yesterday amid concerns about the South American soybean crop and another strong weekly export sales tally. May beans closed above $13.60 yesterday and remained above this level overnight. Technicals remain strong, although futures are due for a correction as the market is overbought according to the 9-day Relative Strength Index.

Wheat: 2 to 3 cents lower. Futures surged yesterday on news Egypt purchased U.S. and Canadian wheat -- signaling U.S. prices were once again competitive. This helped to offset a lackluster weekly export sales tally. However, futures saw a setback overnight due to dollar strength and still have a lot of work to do to improve market technicals. There are also concerns about the HRW wheat crop in the U.S. due to the early warmup raising moisture requirements.

Live cattle: Steady to weaker. Futures are expected to see followthrough from yesterday's late-session decline. Yesterday's sharp price pressure on live cattle futures triggered cash cattle trade at $126 in Texas and Kansas, which is steady to $1 lower than last week's range. Similar sales were reported in Nebraska. Movement was termed as moderate, with followup sales expected today at similar levels. Beef prices softened again yesterday, but movement has continued strong this week.

Lean Hogs: Steady to weaker. Futures are expected to be weaker on spillover from live cattle and concerns about the cash hog market. Pork cutout values were $1.03 lower yesterday, but movement has been strong this week, with 90.5 loads changing hands yesterday. Packers have seen margins widened this week as they work to secure needed supplies for next week. Expectations are for mostly steady bids today.


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