Soybeans Sees Profit-Taking Amid Dollar Strength

February 16, 2012 12:24 AM

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

Corn: Mixed. Corn futures were mixed overnight, with nearbys around 1 to 2 cents lower and deferreds firmer to narrow the spread with new-crop soybeans, which were lower. Soybeans have been actively bidding for acres, so some correction of the spread can be expected. Strength in the U.S. dollar index this morning due to questions whether or not Greece will secure a second bailout are rising after European finance ministers yesterday delayed a decision on the bailout.

Soybeans: 7 to 10 cents lower. Soybean futures were weaker overnight amid profit-taking, as well as from strength in the U.S. dollar index. Weakness in crude oil and gold futures this morning signals a "risk-off" day of trade is ahead. A sell-the-fact reaction is also being seen after China signed purchase agreements in Iowa yesterday for 8.62 million metric tons of soybeans valued at $4.31 billion. More agreements are expected to be signed when the delegation reaches Los Angeles.

Wheat: Mixed. Futures are narrowly mixed overnight, with buying limited by negative outside markets. However, traders are once again paying attention to frigid temps in parts of Europe that are raising concerns about winterkill. More than anything, overnight gains are tied to short-covering. Wheat will have a tough time rallying on its own as the European situation has largely been factored into prices.

Live cattle: Steady to higher. Futures saw a setback yesterday amid profit-taking, but are expected to be supported this morning by the boxed beef market. Choice beef values rose $1.43 yesterday and Select was up $1.68 on solid movement of 244 loads. Packers so far have been reluctant to raise bids, but feedlots have signaled they expect $1 to $2 higher cash cattle bids before moving cattle this week due to tighter showlists.

Lean Hogs: Steady to higher. Futures are expected to be supported this morning from strength in the pork cutout market. Pork cutout values rose $2.41 yesterday thanks to a surge in hams, bellies and loins on strong movement. Traders believe this is the start of a seasonal increase in pork prices that will lift packers' demand for hogs. Packers finally saw profit margins return to the black yesterday, but say this week's have largely been secured.


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