Rebounding equities boosted the commodity markets overnight

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Resurgent equity markets seemingly boosted commodities overnight. Corn futures sustained Wednesday’s upward momentum, with traders citing yesterday’s announcement of a large sale to a Chinese firm as a sign of more to come. Still, ideas that U.S. stock values had turned decisively higher probably played a big role in the corn rise as well. December corn futures rose 2.25 cents to $4.4575/bushel early Thursday morning, while May added 2.25 cents to $4.67.

The soy complex also posted a good Wednesday night showing. Early equity index gains apparently offered considerable support for soybean and product prices last night, although some might credit news of a sizeable sale from Chinese government stocks as supportive. The fact that November beans seemed to break out above their 10-day moving average probably attracted buying as well. November soybeans jumped 10.5 cents to $12.9825/bushel in early Thursday action, while December soyoil surged 0.44 cents to 41.11 cents/pound, and December soymeal gained $2.5 to $414.2/ton.

Wheat futures also posted modest gains. Strength spilling over from the corn and soy pits, as well as the equity index surge probably sparked buying in the wheat markets as well. Bulls will likely point to news indicating diminished Russian production next spring, but that wasn’t particularly fresh information. Technicians seemingly responded well to recent firmness at chart support. December CBOT wheat climbed 3.75 cents to $6.9425/bushel as dawn broke over Chicago, while December KCBT wheat moved up 3.75 cents to $7.6275, and December MGE futures lifted 3.75 cents to $7.5675.

Cattle futures inched upward overnight. The dearth of USDA news remains a major handicap to livestock futures trading, which largely explains the lack of volatility in the market. The October delivery situation seems mixed, with the low numbers of notices being posted largely offset by the lack of demands from packers to this point. This week’s cash trading will very likely play a big role in short-term price direction. December cattle futures edged up 0.10 cents to 132.05 cents/pound early Thursday morning, while April rose 0.02 to 134.70. Meanwhile, November feeder cattle slipped 0.07 cents to 166.30 cents/pound, and January skidded 0.07 to 166.30.

Increasing hog supplies appear to be undercutting hog futures. Hog futures dove Wednesday and remained under pressure overnight. Talk of cash and/or wholesale weakness probably played a role in the drop, but wire service reports cited growing hog supplies for the drop. Indeed, a traditional seasonal surge could greatly depress country prices during the days and weeks ahead. December hog futures slid 0.05 cents to 86.47 cents/pound around dawn Thursday, whereas April inched up 0.05 cents to 89.75.

Equity market shifts affected cotton futures this morning. Although ongoing supply considerations are almost surely affecting the cotton market, recent action has seemingly reflected demand concerns. That is, the fiber market has been moving in concert with the equity markets, since the latter are routinely viewed as harbingers of the economic outlook and future apparel demand. December cotton rallied 0.92 cents to 84.12 cents/pound soon after sunrise Thursday, while March advanced 0.92 to 84.90.



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