The crop markets performed well again Tuesday night. Little fresh news emerged overnight, which probably encouraged bullish grain and soy traders to continue buying. They’re likely being joined by technicians impressed by recent market action as well. Nearby corn contracts are advancing after closing above their 10-day moving average yesterday. December corn futures rallied 2.5 cents to $3.7625/bushel in early Wednesday trading, while May moved up 2.5 to $3.98.
Talk of sport market tightness is once again boosting the soy complex. The spot bean and meal markets have proven quite strong recently, with vigorous demand apparently meeting limited quantities coming off farms. That’s translating into strong CBOT gains. Indeed, technicians likely viewed Tuesday’s bean and meal action as a breakout from a bull flag formation, which might carry prices much higher. January soybean futures surged 13.00 cents to $10.77/bushel in predawn Wednesday action, while December soyoil gained 0.24 cents to 33.11 cents/pound, and December meal vaulted $9.6 to $410.2/ton.
The wheat markets are rallying as well. The global wheat situation still seems less than bullish, but that isn’t keeping wheat futures from following corn and beans higher. Traders are reportedly focusing upon potential production problems stemming from the current cold snap and damage being done to the emerging winter wheat crop. December CBOT wheat advanced 8.25 cents to $5.335/bushel early Wednesday morning, while December KC wheat climbed 8.75 cents to $5.8725/bushel, and December MWE wheat added 7.75 to $5.745.
Cattle traders seemed indecisive Tuesday. Underlying cattle market fundamentals look quite bullish, especially if current weather conditions become the winter norm. However, worries about poor demand in the current high-price environment, as well as less than stellar futures action are raising doubts about the price outlook. Higher choice cutout Tuesday afternoon suggests a firm opening. December live cattle futures closed up 0.12 cents to 167.25 cents/pound Tuesday, while April futures skidded 0.05 to 167.50. Meanwhile, January feeder cattle futures sagged 0.10 cents to 232.65 cents/pound, but March feeders rose 0.25 to 230.55.
Talk of firming spot markets seemed to support CME hogs Tuesday. Although hog supplies are rising seasonally, and pork demand seems flat at best, country prices were called steady and pork cutout surged at noon. Those items probably encouraged traders hoping for a ham-led bounce into Thanksgiving. Cutouts didn’t rise as much as indicated at noon, so today’s opening may be weak. December hog futures rallied 0.35 cents to 89.90 at their Tuesday settlement, while April hogs gained 0.20 to 91.00.
Financial market moves may be weighing on cotton futures. Texas quality concerns, as well as spillover strength from the soy and grain complexes, sparked a big cotton bounce from Tuesday’s early lows. However, prices are mixed this morning, possibly reflecting technical resistance and less than supportive overnight action in stock index futures and the U.S. dollar index. December cotton futures dipped 0.12 cents to 63.18 cents/pound shortly after sunrise (EST) Wednesday, while March futures rose 0.10 cents to 61.63.