Outside markets again seem to be moving crop futures. Corn joined a general grain and soy rally overnight despite a lack of news and widespread Wednesday bearishness. Conversely, equity index and crude oil futures rose overnight, which, along with dollar weakness, seemed to pull corn higher as well. Nearby futures also found chart support at their 10-day moving averages. March corn bounced 2.75 cents to $3.8625/bushel Wednesday night, while July gained 2.5 to $4.015.
Indonesian news boosted beans and oil Wednesday night. Indonesian officials announced overnight that they were considering a subsidy for domestic biodiesel production, which sent palm oil markets soaring. Soyoil futures also jumped and appeared to pull bean prices higher as well. Prospects for record South American crops are likely limiting gains somewhat, as exemplified by the weak showing posted by meal futures. March soybean futures rallied 6.25 cents to $9.7825/bushel in early Thursday action and March soyoil leapt 0.83 cents to 31.42 cents/pound, while March meal stalled at $332.7/ton.
Talk of improved international buying supported the wheat markets. Wheat futures declined by varying amounts Wednesday, but moved generally higher overnight. Continued talk of active global buying probably offered support, particularly after Egyptian officials discussed the potential for buying American grain. Equity and energy gains probably encouraged bulls as well. March CBOT wheat rose 3.25 to $5.1425/bushel early Thursday morning, while March KC wheat added 1.5 to $5.5425/bushel, and March MWE wheat climbed 4.0 to $5.70.
Cattle futures accelerated downward as Wednesday passed. Strong beef gains seemed to reverse recent CME cattle losses Tuesday morning, but subsequent losses encouraged bears Wednesday. The cattle/beef situation still seems relatively tight, but ideas that the West Coast port strike has largely halted meat shipments to Asia seemed to depress the whole livestock complex. Afternoon GLOBEX trade suggested a weak opening again today. April live cattle futures tumbled 1.92 cents to 148.65 cents/pound at Wednesday’s close, while August cattle lost 1.62 cents to 140.35 cents/pound. Meanwhile, March feeder cattle futures plunged 2.77 cents to 196.72 cents/pound and May feeders plummeted 2.82 to 197.62.
Weight news likely exaggerated Wednesday’s hog losses. Tuesday’s pork weakness probably caused today’s poor CME opening. Bullish hopes also took a hit from the weekly Iowa-Southern Minnesota cash report, since it indicated a contra-seasonal rise in hog weights, thereby implying surprisingly large hog supplies. Talk of halted Asian exports may have depressed prices as well. We look for an early bearish follow-through. April hog futures fell 2.75 cents to 68.12 cents/pound at Wednesday’s CME settlement, while June hogs crashed the 3.00-cent daily limit to 79.62.
Cotton traders may be expecting slower exports. ICE cotton futures turned lower along with most commodity markets Wednesday, then followed through to the downside overnight. The nearby March contract did bounce from moving average support, but remained at lower levels as Thursday dawned. One has to wonder if New York traders expect the weekly Export Sales report to state last week’s total well below the huge totals of the past few weeks. March cotton futures sank 0.18 cents to 61.05 cents/pound just after sunrise Thursday, while the July contract fell 0.47 to 61.53.