Corn futures set back Tuesday night, thereby seeming to continue its late pattern of following soybeans. Of course, events in South America, particularly the weather forecasts, largely exert the same influences over both markets, but Tuesday’s bullish March soybean breakout above its 100-day moving average probably encouraged considerable price optimism. Having the crop markets rise in the face of big Tuesday losses in the equity and energy sectors was also impressive. However, South American forecasts published early this morning were favorable for production, thereby seeming to weigh on prices. March corn futures slipped 0.25 cent to $3.7225 bushel as Wednesday dawned over Chicago, while the May contract lost 0.25 to $3.7725.
Soybean futures closed 5 1/2 to 7 cents higher, closing upper-range. Funds purchased a net 7,000 soybean contracts (35 million bu.) today. Soybean futures moved higher on short-covering and technical buying as prices thrust through resistance at recent highs. A rise in Gulf basis had traders on the buy side as they look for an increase in export business. The slightly weaker dollar provided some support. Traders were also encouraged soybean prices could edge higher even in the face of sharply lower crude oil futures and equity markets today.
Wheat futures favored the upside for much of the day, but prices pared losses at the close. SRW wheat settled steady to 3/4 cents lower, HRW wheat posted losses of 1 1/2 to 1 3/4 cents, and HRS wheat posted gains of around a penny. Funds bought 1,000 contracts (5 million bu.) today. Wheat futures rallied alongside soybeans this morning as the move above Friday's high sparked some technical-based buying. But eventually, profit-taking returned to the market, resulting in a low-range close for many contracts.
Live cattle futures finished with slight gains following a two-sided day of trade. Negative outside markets failed to weigh on cattle futures today. Instead, traders mildly covered short positions. Inclement weather across portions of the Plains and Midwest was also price-supportive. With nearby cattle futures trading in line with the lower end of last week's cash cattle trade in the Plains, there isn't any weather premium in the market. Therefore, downside risk in futures is limited given the wintry weather and stressful feedlot conditions. April live cattle futures held within last Friday's wide range again today.
Lean hog futures faced pressure today and most contracts extended losses as the day progressed. February through July futures posted losses ranging from $1.00 to $1.60, while deferred months posted slightly lighter losses. Traders took advantage of recent strong gains with some profit-taking today. A recent slowdown in pork movement also led to concerns about the product market and thus futures putting in a top in the near future. But this morning, movement picked back up to 185.98 loads on a slight (24-cent) pullback in prices.
Cotton futures rallied today and futures settled high-range with gains of 45 to 73 points. Fundamental analysis: Cotton futures enjoyed strong follow-through buying on Tuesday as traders paid more attention to lower global ending stocks estimates than warnings about slack demand. Yesterday, the International Cotton Advisory Committee (ICAC) in its first estimate for 2016-17 said that while global cotton production will likely climb from 22.64 MMT in 2015-16 to 24.31 MMT, global ending stocks will likely to slip by around 400,000 MT from the year prior to 22.16 MMT.