Ethanol news seemingly powered Thursday’s corn rally. The USDA’s Outlook Forum got underway this morning, but little market-moving corn news was forthcoming. However, yellow grain prices turned sharply higher around midmorning, which apparently marked a bullish reaction to news that U.S. ethanol stocks declined last week despite a modest production increase. That implies robust demand. March corn rallied 6.5 cents to $3.925/bushel late Thursday morning, while July advanced 5.75 to $4.0525.
The soy complex also surged at midmorning. The API released information on energy production and stocks ahead of the official EIA data, thereby triggering oil selling and corn and soy gains. Both the ethanol and distillate numbers were impressive, with bean oil reacting well to the news. Bulls were also encouraged by the USDA’s relatively low soy planting figure from the Outlook Forum, although many harbored big doubts on that score. March soybean futures jumped 15.25 cents to $10.11/bushel as the lunch hour loomed Thursday, while March soyoil declined only 0.10 cents to 31.91 cents/pound, and March meal surged $8.9 to $347.5/ton.
The wheat markets followed corn and beans higher. Morning news of strong wheat exports reemphasized the fact that U.S. grain remains quite expensive by global standards and may be vulnerable to a sizeable downward adjustment as a consequence. The 2015 wheat seedings figure seemed rather high when compared to private estimates, but appeared to have little impact. Whatever the cause, wheat futures seemed to follow corn and soybeans higher later in the morning. March CBOT wheat climbed 7.5 cents to $5.3525/bushel in late Thursday morning action, while March KC wheat rose 2.25 cents to $5.5025/bushel, and March MWE wheat bounced 2.75 to $5.8475.
Cattle traders seemed to lose confidence Thursday morning. Recent spot market developments have seemed very supportive of live cattle futures, especially with the nearby contracts trading at substantial discounts to last week’s cash levels. And yet, futures proved surprisingly weak this morning, which may reflect fresh pessimism about the likely result of this week’s cash trading. April cattle futures fell 0.80 cents to 151.82 cents/pound shortly before lunchtime Thursday, while August cattle sank 0.32 cents to 142.52 cents/pound. Meanwhile, March feeder cattle futures slumped 0.55 cents to 202.55 cents/pound and May feeders tumbled 0.57 to 200.77.
Spot firmness is spurring sizeable CME hog gains. After falling consistently for weeks, the cash hog and wholesale pork markets are showing clear signs of firming. The fact that they seem to be bottoming in the absence of a resolution to the export situation is probably encouraging traders as well. April hog futures soared 2.25 cents to 66.47 cents/pound around midsession Thursday, while June hogs leapt 2.00 to 81.25.