Wheat Working on Sharp Weekly Gains

May 18, 2012 01:16 AM

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Overnight highlights. Following are highlights of overnight trade:

Corn: 1 to 4 cents higher. Futures were firmer overnight amid tight old-crop stocks, with upside potential limited by strength in the U.S. dollar index. There are some concerns about the dry near-term forecast for the Corn Belt, although traders aren't overly concerned about it as warmth is propelling growth. But if the Midwest goes without a shower for another week, it would raise concern.

Soybeans: 6 to 8 cents lower. Futures were weaker overnight, but didn't stray too far from unchanged as traders recognize the stock situation remains tight and is projected to tighten further into the upcoming marketing year. While there is concern about China's economy slowing, measures to keep money flowing through their banks keeps optimism high of strong demand for soybeans from the country. Focus in the market will be on end-of-the-week position squaring.

Wheat: Mixed. Futures are working on sharp weekly gains, with those gains stalled overnight as traders work to even positions. Renewed concerns about the crops in Europe, the FSU and the Southern U.S. Plains sparked this week's strong gains. However, wheat doesn't have a reputation as being a lasting price leader to the upside.

Live cattle: Steady to firmer. Futures are called steady to firmer as traders expect higher cash cattle trade to begin today and begin to more actively even positions ahead of Friday's Cattle on Feed Report. The report is expected to show On Feed at 100.3%, Placements at 88.4% and Marketings at 98.6% of year-ago. The beef market was firmer yesterday, but movement moderated.

Lean Hogs: Steady to firmer. Futures are expected to see a lift from signs a low has been posted. Pork cutout values improved 75 cents yesterday to lift packers' profit margins and improve demand for hogs. The cash market is expected to be steady to firmer today, but some mixed tone could be seen as some packers work to pad margins after cutting in the red for months.


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