The crop markets traded mostly lower again Wednesday night. Little fresh ag news emerged overnight, which seemingly encouraged bears to extend recent losses in crop futures. Although the dollar moved little overnight, traders may have been reacting to Wednesday’s negative stock market response to the latest Fed statements. Weak short-term demand prospects and technical factors appeared to drag corn futures lower once again. March corn sagged 3.0 cents to $3.7025/bushel early Thursday morning, while July slid 2.75 to $3.8625.
Soymeal strength is apparently limiting bean losses. Although crude oil futures stabilized Wednesday night, yesterday’s energy drop was echoed by the palm oil market in overnight action. Thus, soyoil futures continued their late slide. In contrast, the soymeal market rose modestly, thereby seeming to reflect vigorous underlying demand. The meal rise also appeared to limit losses in the bean pit. March soybean futures skidded 1.0 cent to $9.6925/bushel Wednesday night, while March soyoil fell 0.35 to 29.99 cents/pound, but March meal gained $0.2 to $337.6/ton.
Wheat prices continue their recent decline overnight. Although the Black Sea situation continues simmering, it has clearly done little to boost the wheat markets lately. The suspicion that last fall’s fighting was worse and ultimately did not affect the flow of grain from the region seems to be limiting the market response at this juncture. Talk of a global glut and a weak world economy isn’t helping the bullish cause. March CBOT wheat dipped 2.75 cents to $5.025/bushel in early Thursday trading, while March KC wheat stalled at $5.3575/bushel, and March MWE wheat slipped 1.0 to $5.54.
Livestock traders seemed to believe the recent breakdown has ended. Beef cutout values plunged Tuesday afternoon, as did pork quotes. And yet, nearby CME livestock futures firmed on Wednesday’s opening then marched upward. The bullish cattle response to bearish news at least suggests the industry had anticipated the beef news, and might easily represent ideas that the recent livestock sector breakdown has run its course. Futures slipped in afternoon electronic trading, which may presage a poor opening. February live cattle futures surged 1.12 cents to 153.95 as Wednesday’s CME pit session ended and April cattle climbed 0.50 cents to 151.50 cents/pound. January feeder cattle futures leapt 1.67 cents to 212.45, and March feeders rallied 0.52 cents to 204.35.
Hog futures also posted a big Wednesday surge. Although cash hog prices were mixed-to-weak again Tuesday afternoon, pork cutouts suffered a major drop. As one would expect, CME futures fell on Wednesday’s opening, but they then staged a stunning reversal led by the mid-year contracts. As in the cattle markets, this suggests the industry thinks the breakdown is ending. However, Wednesday’s late reports weren’t very supportive, so today’s opening looks unpromising. February hog futures ended Wednesday having jumped 2.1 cents to 71.52 cents/pound, while June hogs soared the 3.00-cent limit to 84.57.
Cotton futures declined in concert with the other crop markets. After dipping in early Wednesday trading, cotton futures closed higher once again. Wire service reports indicated that short-covering had powered the rebound, but traders may also have been looking forward to today’s weekly Export Sales report, since those have recently indicated strong overseas interest. On the other hand, the late equity market breakdown probably weighed on fiber prices last night. March cotton futures slumped 0.12 cents to 59.32 cents/pound just after sunrise Thursday, while the July contract lost 0.05 to 60.99.