Weaker U.S. Dollar Index Supportive of Commodity Buying

October 17, 2012 01:31 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: 2 to 4 cents higher. Sharp dollar weakness is providing a boost for grain futures this morning, with most contracts returning to near yesterday's session highs. But given a lack of fresh news, price consolidation is likely to continue. The lack of fresh demand news gives traders no incentive to extend long positions despite tight supplies.

Soybeans: 2 to 9 cents higher. Soybeans have been two-sided trade following yesterday's late-session selloff. Without fresh news to digest and expectations South America will produce enough soybeans to satisfy demand later this winter, traders are moving to the sidelines. Still, demand for U.S. soybeans is too robust, which is helping to limit selling and should eventually inspire value buying.

Wheat: 3 to 7 cents higher. Chicago and Kansas City wheat are mostly 3 to 4 cents higher, with Minneapolis seeing gains of 3 to 7 cents this morning amid tight global supplies of high-quality wheat. Much of this morning's strength comes from weakness in the U.S. dollar index, as recent rains are giving the winter wheat crop a boost in the U.S. Southern Plains.

Live cattle: Steady to higher. Live cattle futures are expected to see a boost from the strong start to the boxed beef market for the week. Choice beef values have risen above $195-per-cwt. -- a level that has slowed demand in the past. Yet movement of 173 loads yesterday is deemed "solid." Tighter market-ready supplies have traders anticipating higher cash cattle trade this week.

Lean hogs: Mixed. Futures are expected to be choppy today, as traders anticipate the pork market is working on a near-term high. Pork values slipped just 7 cents yesterday on strong movement of 91.75 loads, but packers have the increase in market-ready supplies has them well stocked for the week. As a result, the cash hog market is expected to be mostly steady.


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