USDA data is weighing on the grain markets. Tuesday’s belated release of the weekly USDA Crop Progress report likely spurred overnight selling. Not only did the report indicate corn plantings still ahead of normal, the initial corn condition rating at 74% good-to-excellent was better than normal. The market may also be suffering from follow-through selling in the wake of yesterday’s drop. July corn futures dipped 2.0 cents to $3.53/bushel Tuesday night, while December lost 2.25 to $3.71.
Argentina’s labor situation still seems to be supporting the soy complex. Overnight palm oil slippage seemed to drag soyoil lower as well, since crude oil futures edged upward. Meanwhile, the Crop Progress data indicated good bean planting progress. Nevertheless, bean and meal futures rose last night, which probably reflects growing concern about the Argentine labor situation and that country’s ability to ship product in the near future. July soybean futures rose 2.75 cents to $9.2525/bushel in early Wednesday action, while July soyoil sagged 0.09 cents to 32.05 cents/pound, and July meal bounced $3.2 to $305.1/ton.
Wheat markets also followed through to the downside overnight. The Crop Progress report looked negative for the Minneapolis market, since spring wheat condition ratings jumped from 65% to 69% good to excellent. High-end winter wheat ratings were unchanged, which probably disappointed bulls. Bearish momentum spilling over from Tuesday’s breakdown is likely playing a role in the drop, as is talk of increasing Russian production. July CBOT wheat futures fell 8.25 cents to $4.8525/bushel shortly after sunrise Wednesday, while July KC wheat dropped 10.5 cents to $5.14/bushel, and July MWE wheat tumbled 9.0 to $5.4425.
Cattle futures posted a belated bullish reaction to last Friday’s USDA Cattle on Feed report. Concurrent U.S. dollar strength and diving equity markets probably weighed on cattle prices due to their negative demand implications. In contrast, firm midday beef quotes probably supported CME quotes. Ultimately, nearby futures slippage and deferred gains seemingly represented a belated price reaction to Friday’s USDA report. Afternoon beef gains and GLOBEX actions suggest a strong opening today. June live cattle futures slid 0.32 to 151.80 cents/pound at Tuesday’s CME settlement, while August cattle dipped 0.07 to 150.62. Meanwhile, August feeder cattle futures advanced 0.60 cents to 219.60 cents/pound, and November feeders moved up 0.42 to 216.72.
Large supplies apparently spurred Tuesday’s CME hog sales. Last week’s hog slaughter topped the comparable year-ago figure by 9.3%, thereby suggesting a relative increase in short-term hog and pork supplies. That news, along with the negative demand signals being sent by the financial markets seemed to weigh on the swine market to start the week. Afternoon reports of spot market gains also seem to point to early price gains. June hog futures stumbled 0.55 cents lower to 83.17 cents/pound in late Tuesday trading, while December declined 0.17 to 70.07.
Slow Texas plantings are again supporting cotton futures. ICE traders have apparently come to view recent rainfall in west Texas growing areas as excessive, so the market has begun reacting positively to reports of rains and/or planting delays. Thus, yesterday’s Crop Progress report results seemingly powered overnight gains. July cotton rallied 0.20 cents to 63.51 cents/pound early Wednesday morning, while December futures gained 0.14 to 64.22.