The grain markets were higher early Wednesday morning on short-covering after the price shift to a lower range last week on larger than expected supply and lagging exports. Support can be found at $3.50 and the resistance at $3.6775. Corn harvest climbed to 96% complete, vs 93% last week and 88% last year. Ethanol production data will be released at 9:30 a.m. CST. The French corn crop was estimated at 13.15 million tonnes, up fractionally from 13.1 million in their estimate last month and 27% lower than 2014 and 15% below the five-year average. The dollar was weaker overnight but continues to test the 7-month high. Gold was lower while Brent crude was higher. December corn futures gained 1.5 cents to $3.635/bushel early Wednesday morning, while March climbed 1.25 cents to $3.6925.
Soybean futures lifted overnight on the lower dollar and short-covering. The largest soybean crop ever is officially complete while low prices have kept many beans from the market, supportive to basis. The $8.68 level for the January contract can be seen as resistance. The weather outlook in S. America is calling for moisture and warm temps, ideal for crop development. Brazil’s crop is 56% complete compared to the 68% average. The election in Argentina this Sunday could represent a pivotal change to U.S. soybean export demand. January soybeans moved 3 cents higher to $8.67/bushel before dawn Wednesday morning, while December soyoil gained 0.20 cents to 27.67 cents/pound and December meal was $1.20 higher at $289.7.
Wheat futures finished lower for a 3rd day as rainfall around the Midwest has provides ideal conditions and strong winter wheat condition ratings going in to dormancy. Last Week’s wheat export inspections were reported at 10.3 mil bu, missing the expectation of 11 mil bu – 16.5 mil bu range. Winter wheat condition ratings jumped another point to 52% good to excellent, after also rising two points last week from 51%. Winter wheat planting came in at 94% complete, vs 92% last week, 95% last year and 98% for the five year average. Planted wheat is 87% emerged vs 80% last week, 86% last year and 86% for the five year average. December CBOT wheat futures lost 6 ½ cents to $4.87 ½/bushel on the close Tuesday, while Dec KC wheat lost 4 cents to $4.63 ¼, and December MWE fell 3 cents to $5.01 ¾.
Short-covering caused live cattle futures to turn higher Tuesday. Boxed beef cutouts were higher with choice up 0.19 to 209.23 and select up 1.55 to 198.54. Cattle slaughter so far this week was at 213,000 head, compared to 223,000 head last week and 224,000 head this time last year. The Dec contract hit a new low Monday, near one cent lower than the low set last Tuesday. Competition from holiday ham and turkeys has dampened wholesale beef demand and may add continued pressure. December live cattle lost 3 cents to 127.67 cents/pound Monday, while February futures gained .27 cents to 128.02. January feeder cattle climbed 1.15 cents to 161.30 and March feeders advanced 1.75 cents to 158.90.
Despite the stronger dollar, lean hog futures rallied Tuesday on bargain hunting after hitting new contract lows Monday. Country hogs fell .74 lower to 50.34 and the lean hog index fell another 1.64% to 56.98, narrowing the cash/futures spread to under 3 cents. Dec hogs now sit 4 cents below the 20-day moving average. Hog slaughter so far this week was at 874,000 head, compared to 867,000 head last week and 850,000 head this time last year. The nature of the hog cycle means higher supply during the fall/winter, due to gestational timing, while demand is under pressure during the holidays, with the exception of ham demand which may offset declines in other cuts. December hog futures gained 2.55 cents to 54.17 cents/pound Tuesday and April hogs gained 2.25 cents to 61.30.
ICE cotton futures were mixed Tuesday. On Monday, cotton crop progress was reported at 64% completed, compared to 58% last week and the 74% five-year average. Last week, the US cotton production estimate came in at 13.28 million bales, vs the average estimate for US cotton at 13.13 million bales and the Oct estimate of 13.34 million. The Nov export estimate was steady with last month at 10.20 million bales, vs the average trade expectation of 9.97 million bales. 2015/16 US ending stocks were 3.1 million bales, vs the average forecast of 3.25 million bales. 2015/16 world ending stocks were 106.09 million bales, vs 106.97 million in Oct. December cotton futures gained 0.24 cents to 61.77 cents/pound, while May cotton gained 0.19 cents to 63.57.