Corn continued its sustained advance Wednesday night, with good export news compounding the reaction to last week’s USDA cut to the 2015 US crop. Yesterday’s report of another sale of more than 4 million bushels of US corn, the third sale in the past week, indicates US grain is more competitive on global markets. Despite the overnight setback in equity index futures, corn kept edging upward, with wire service reports citing talk of a cutback in US corn plantings this spring. March corn futures rose 1.5 cents to $3.7025/bushel in predawn Thursday action, while May moved up 1.5 to $3.7475.
Soybeans couldn’t maintain it mid-January rally Wednesday, with prospects of improved Brazilian production and the concurrent equity market breakdown seeming to depress prices. Bullish profit-taking likely added to the downward pressure. The drop continued Wednesday night trading, but prices stabilized in the early-morning hours. Wire service sources credited the renewed firmness to industry expectations for surging Chinese buying ahead of its spring festival next month. The fact that bears couldn’t sustain a drop below the nearby March contract’s 40-day moving average likely spurred bullish interest as well. March soybean futures inched 0.25 cent lower to $8.7375 in early Thursday trading, while Mar soyoil tumbled 16 points to 29.65 cents per pound and March meal slipped $0.10 to $269.70.
Wheat futures seem to be following soybeans these days, dropping in concert Wednesday then firming in the early morning hours. Wheat traders could also cite a private firm’s cut to its EU soft wheat production forecast and a small South Korean purchase of US milling wheat for the modest gains. However, the nearby contracts are still facing significant moving average resistance at slightly higher levels. March CBOT wheat edged 0.75 cent higher to $4.7225 per bushel Wednesday night, while March KC wheat rallied 2.75 cents to $4.70 and March MWE added 0.25 cent to $4.95.
US equity markets plummeted Wednesday with crude oil falling further south of $30.00. The drop in the outside markets pressured lived cattle, reversing recent gains. A weaker US economy weigh on prices as traders worry about consumer demand for the more expensive meat against cheaper pork and poultry alternatives. Pressure by the futures drop and expectations of typical late-month beef weakness suggests cash prices will head lower. Wholesale demand could take another hit as winter storms move up the East Coast. US Beef Cutouts continued rising Wednesday, with choice cuts up 0.76 to 230.69 cents/pound, while Select cuts climbed 1.02 to 224.72. February live cattle dropped 2.05 cents to 127.250 cents/pound on Wednesday’s close, while April futures fell 1.97 cents to 128.175. March feeder cattle declined 2.55 cents to 149.725 cents/pound and April feeders slid 2.83 cents to 149.975.
Weak cattle futures and outside equity markets pressured US hogs Wednesday, partially reversing Tuesday’s gains. Losses were limited by lighter hog weights and firm cash hog prices. Lower hog weights suggest farmers are moving hogs to market as scheduled. New Chinese environmental rules are reportedly shutting down or moving hog farms, thereby reducing its hog herd and boosting pork prices. Lean hogs found support in the front months but weakened in the deferred contracts. Bull spreading supported nearby futures, anticipating relative increases on the front end. February hog futures closed 0.13 cents/pound higher at 62.725 cents/pound Wednesday, while April hogs lost 0.65 cents to 67.075 cents/pound.
Cotton futures fell in concert with the equity markets Wednesday as traders worried about global demand prospects. Talk that diving crude oil prices will cause commensurate cuts in synthetic fiber prices also depressed the ICE market. A report that Chinese officials may soon sell off a portion of its massive government cotton stockpile didn’t help the bullish cause. Prices continued sliding overnight, thereby likelyreflecting the equity index futures’ inability to sustain their Wednesday afternoon rebound. March cotton slid 0.08 cents to 61.89 cents/pound early Thursday morning, while May cotton skidded 0.09 to 62.19 cents/pound.