News that Russia’s Ag Ministry had proposed to shift its export restrictions from wheat to corn and barley supported the yellow grain market in the face of general bearish influences Wednesday. Downward pressure resumed overnight following news that China had made a major purchase of Ukrainian corn. CBOT futures slipped, but the nearby March contract is still well supported by short-to-mid-term moving averages. March corn futures slid 1.5 cents to $3.6775/bushel Wednesday night, while May lost 1.5 cent to $3.73.
Argentine drought concerns apparently pushed soybean futures higher Wednesday, with bulls probably being joined by technicians impressed by the March bean contract’s bounce from its 40-day moving average, increasing the premium over corn. Bean and soyoil futures set back overnight, possibly in reaction to the lack of a Wednesday afternoon interest rate increase from the Federal Reserve, since financial market traders interpreted the Fed’s statements as confirming the risk of a global recession. South American weather forecasts will continue playing a big role in short-term moves, especially before the weekend trading halt. March soybean futures declined 2.25 cents to $8.8075/bushel in predawn Thursday action, while March soyoil dipped 0.11 cents to 30.76 cents per pound, but March meal stalled at $272.50/ton.
Russian news has moved the wheat market the past two days. Russia’s Agriculture Ministry reportedly suggested Tuesday that it was considering additional restrictions on that nation’s grain shipments, which was seen as applying to wheat (as it did last year). Wheat rallied strongly on that news, then reversed quickly on Wednesday news that they were talking of shifting those restrictions from wheat to corn and barley. Futures traded mixed to lower overnight, apparently following through upon Wednesday’s breakdown. As in the other main crop markets, the nearby contracts continue trading around moving average support. March CBOT wheat skidded 1.5 cents to $4.75 per bushel in early Thursday trading, and March KC wheat sagged 0.5 cent to $4.67, while March MWE inched 0.25 higher to $4.9675.
Investors expecting cash gains supported live cattle futures Wednesday. Short-covering helped push prices even higher. Funds continue to add to their bull spreads. Feeder cattle followed live cattle futures. Last week cash cattle sold between $130 and $135. Bids out of Texas have reached $130 per cwt on offers of $138. Slim packer margins though have some processors cutting slaughter to level out cash bids. US boxed beef cutouts weakened Wednesday, with Choice cuts down $1.68 to $221.33 and Select cuts down $1.40 to $215.02. The spread has narrowed recently to $6.31. February live cattle advanced 2.70 cents to 135.725 cents/pound on Wednesday’s close, while April futures grew 1.85 cents to 135.250. March feeder cattle rose 0.68 cents to 159.925 cents/pound and April feeders climbed 0.95 cents to 159.60.
Firm support from cattle futures and strong cash prices supported lean hog futures. Strong cash prices have investors betting on higher nearby prices and lower deferred. A rise in bull spreading in the hog market lent support for the March contract. April futures found support above its nearby resistance, the 200 day moving average ($69.793), triggering technical buying. US daily hog slaughter estimate for the week to date is 1,312,000 head vs 1,255,000 head last week, and 1,282,000 last year. Country hog prices rallied $1.47 to a weighted average price of $59.96 on Wednesday. February hog futures closed 1.05 cents/pound higher at 65.375 cents/pound Wednesday, while April hogs added 0.88 cents to 70.475 cents/pound.
Cotton futures closed lower for the third straight session. Concerns about Chinese demand pressured futures to their lowest level in four months. A potential auction of China’s large stockpile will continue to weigh on trader’s decisions till a more clear direction is announced. Some sources also cited active long liquidation for the weakness. The fact that March futures recently failed at intermediate term moving average resistance and fell through support associated with its 10-day MA Monday is likely adding to bearish pressure. March cotton slumped 0.55 cents to 60.86 cents/pound in Wednesday trading, while May cotton fell 0.56 to 61.45 cents/pound.