Corn futures are expected to open steady to 4 cents lower. Corn prices were lower in overnight trade as weak outside markets had an impact. The dollar is stronger and equity markets are weak. Concerns about the EU financial crisis are driving down equity markets both here and overseas. With a three-day weekend looming traders are not anxious to jump into the commodity markets.
Soybean prices are called steady to 5 cents higher. The soybean price strength in the face of weak outside markets reflects the tight supply and demand fundamentals. With the strong rally in soybean futures over the past month, the actual acreage of soybeans for 2012 is expected to be above the 83.9 million acres indicated in the Prospective Plantings report. The update on South American production as well as the supply and demand balance for the U.S. will be key features in next week’s USDA forecast.
Wheat prices are expected to open mixed on Thursday. Wheat prices collapsed on Wednesday and follow through selling is expected to pressure prices for some contracts early on Thursday. The strength in the dollar and declining equity prices will pressure wheat futures to. The weekly export sales report due out later this morning is expected to be bearish for wheat with 23 million bushels shipped needed to stay on pace for USDA’s crop year export total of 1 billion bushels.
Cattle prices are expected to open steady to higher on Thursday. Cattle futures contracts are significantly oversold and we could see some position evening ahead of the three-day weekend. Cattle futures remain far below cash prices, but the market does not have a lot else going for it. Beef prices continue to drop and processing margins are well below breakeven. Cash cattle prices will be down significantly this week. Prices for dressed cattle were down $8 to $9 from week ago levels yesterday. Cash market activity is probably pretty much wrapped up for the week.
Lean hog futures are expected to open steady to higher on Thursday. As is the case for cattle, there isn’t a lot of news to support hog futures prices. Both cash hog prices and pork prices edged up on Wednesday, but they remain very low and they will need to improve pretty significantly just to get into the same neighborhood as the May contract. Hog weights are creeping up suggesting a backlog of heavy weight hogs. Pork demand should benefit from the “pink slime” uproar affecting demand for hamburger and broiler production continues to decline. Hog prices should start to improve in the coming weeks but not much progress is expected before the weekend.
Cotton futures are expected to open steady to 40 points higher. Cotton futures fell sharply on Wednesday but we should see a little profit taking bounce at the open on Thursday. Cotton futures prices were a little higher in overnight trade. Traders expect a somewhat bearish export sales report on Thursday, and there is growing concern that China may begin selling off some of the stocks they have accumulated. On the other side, India plans to create a 2.5 million bale strategic reserve and may buy as much as 2 million bales over the next couple of months.