Corn futures stalled at moving average resistance Tuesday night. Corn futures proved surprisingly strong Tuesday afternoon despite a general lack of supportive news. Late equity strength seemed to offset the bearish effects of the ongoing U.S. dollar surge, but traders talk more about bargain hunting and corn/soybean spreading. Prices dipped overnight, which may simply have reflected the fact that Tuesday’s rise left nearby futures just below their 10-day moving average. March corn futures slipped 0.75 cent to $3.895/bushel early Wednesday morning, while July sagged 0.5 to $4.035.
Prices in the soy complex are mixed to higher. Forecasts for late-week rains in some of Brazil’s most productive soybean areas, along with a second cancellation of a U.S. bean sale to China undercut the bean and oil markets Tuesday. Big crude oil losses likely exaggerated the oil decline. On the other hand, underlying signs still suggest vigorous demand for meal, which probably explains that market’s persistent firmness. The fact that nearby bean futures bounced from yesterday’s lows seemed to inspire follow-through buying. March soybean futures bounced 2.5 cents to $9.845/bushel Tuesday night, while March soyoil skidded 0.04 to 32.80 cents/pound, and March meal edged up $1.4 to $327.9/ton.
Renewed worries about Ukrainian conflict are supporting wheat. The global wheat situation still looks rather glutted, but the possibility of a major Russia-Ukraine conflict as that situation again heats up has reignited bullish fires in the wheat markets. One could also argue that the market completed a technical decline late last week and traders are now taking profits. March CBOT wheat climbed 5.5 cents to $5.425/bushel in pre-dawn Wednesday action, while March KC wheat gained 3.75 cents to $5.815/bushel, and March MWE wheat rose 2.5 to $5.92.
Fund selling hit cattle futures again Tuesday. Wholesale beef prices fell Monday, which probably encouraged selling yesterday. Still, it was pretty clear that active fund liquidation was swamping the market as the day passed. Despite very supportive fundamentals, traders apparently think the greatly elevated cattle market will prove vulnerable to much larger losses in the seeming deflationary environment. Late reports of beef weakness suggest a lower opening. February live cattle futures ended Tuesday having fallen 1.40 cents to 153.05 cents/pound, while the April contract dove 1.87 cents to 151.07. January feeder cattle futures gained 0.37 cents to 214.47, but March feeders plunged 2.37 to 202.47.
Cash weakness encouraged CME hog sales as well. The cash hog markets proved rather weak Monday, and Tuesday’s early spot quotes moved even lower. CME traders rather obviously saw little reason to sponsor the long side of the hog market either, especially with worries about deflation and fund selling dominating the commodity markets. However, Tuesday’s late wholesale reports indicated big gains, which bodes well for today’s opening. February hog futures plummeted 2.72 cents to 71.77 cents/pound at their Tuesday close, while June hogs crashed 2.98 cents to 83.67.
Cotton futures bounced modestly overnight. Little pertinent news concerning cotton emerged overnight, but the fiber market posted a moderate rebound from Tuesday’s big losses. Fresh equity index weakness might easily have exerted renewed pressure on ICE values, so one has to wonder if last night’s U.S. dollar decline encouraged a few buyers. March cotton futures rallied 0.27 cents to 58.06 cents/pound shortly after sunrise Wednesday while the July contract advanced 0.21 to 59.82.