Grain futures continued their late Wednesday slide overnight. The crop markets surged to fresh short-term highs yesterday morning, but proved unable to sustain the bullish momentum in the face of technical resistance. Yesterday’s bearish U.S. dollar reversal played a big role in the early advance and probably limited overnight losses. Weather is obviously affecting prices as well. July corn slid 1.0 cent to $3.58/bushel Wednesday night, and December lost 0.75 cent to $3.76.
Dollar weakness may be supporting soybeans and meal. Soybean futures moved in general concert with grain futures Wednesday, but proved somewhat stronger overnight. This may reflect the market’s comparative weakness lately, which in turn increased its sensitivity to the overnight dollar drop. Meal continues tracking with beans, whereas soyoil consolidated its recent EPA-driven surge. July soybean futures gained 2.25 cents to $9.375/bushel in early Thursday trading, while July soyoil dipped 0.18 cents to 34.55 cents/pound, and July meal rose $1.5 to $304.2/ton.
Wheat futures are struggling after Wednesday’s technical failure. The early-week U.S. dollar drop and persistent weather-related concerns powered big wheat gains Monday, Tuesday and again Wednesday morning. However, bulls couldn’t push futures above their May highs, which then seemed to prompt a big wave of profit-taking and short sales. Nearby futures can probably count on strong support at slightly lower levels, but fresh gains may not happen quickly. July CBOT wheat futures sank 125 cents to $5.095/bushel as dawn broke over Chicago Thursday, while July KC wheat slipped 0.75 cent to $5.285/bushel, and July MWE wheat skidded 0.25 to $5.6275.
Bears succeeded in pushing cattle futures lower Wednesday. Persistently firm country cattle prices have tended to pull discounted CME futures higher in recent weeks. However, beef prices are now suffering their traditional spring swoon, which in turn is tending to depress cattle prices. Big Wednesday afternoon losses suggest a lower Chicago opening this morning. August cattle futures fell 1.25 cents to 150.62 cents/pound at Wednesday’s close, while December futures tumbled 1.27 cents to 153.67. Meanwhile, August feeder cattle futures dropped 1.13 cents to 221.90 cents/pound, and November feeders slumped 1.35 to 217.87.
Hog futures headed lower again on Wednesday. While CME hogs performed well early this week, they proved unable to break out above major chart resistance at modestly higher levels. That technical failure, as well as midweek losses at both the cash and wholesale levels, seemed to spark long liquidation and short selling Tuesday. Wednesday afternoon spot quotes bode rather ill for today’s opening. August hog futures declined 1.42 cents to 81.32 cents/pound at the close Wednesday, while December sank 1.27 to 68.02.
Cotton traded mixed Wednesday night. After reacting very weakly to supportive news over the weekend, cotton futures turned upward at midweek. That probably reflected ongoing U.S. dollar losses, thereby favoring export demand for the fiber. However, forecasts for southern Plains dryness may allow laggardly west Texas plantings to accelerate, thereby improving chances for a large fall crop. July cotton was unchanged at 65.24 cents/pound early Thursday morning, whereas December futures had declined 0.14 to 65.14.