Talk of renewed central U.S. rainfall in short-term forecasts seemed to support the corn and soybean markets Wednesday. Concurrent U.S. dollar weakness despite big Chinese stock market losses and the unsettled European/Greek debt situation may also have encouraged bulls in the yellow grain market. The US Dollar Index declined 0.65 to 96.21. September corn futures skidded 1.25 cents to $4.245/bushel at Wednesday’s CBOT close, while December added 1.25 cents to $4.3425.
The soy complex posted a general advance Wednesday. As in the corn market, talk of increased rainfall during the days ahead probably encouraged bulls in the soybean and product markets today. Technical support also seemed generally robust as well. Long position holders also got a boost from a respected private firm, which sharply curtailed its U.S. production forecast when it cut its soybean planting forecast rather substantially. August soybeans climbed 4.75 cents to $9.9675/bushel shortly as Chicago trading wound down Wednesday, while August soyoil advanced 0.17 cents to 31.69 cents/pound and July meal edged up $1.3 to $343.8/ton.
Having U.S. wheat shut out of the latest Egyptian tender probably played a sizeable role in today’s decline in wheat futures, since that once again implied American grain is uncompetitive for many in the global markets. The drop may also have had a technical component, since it seemed to negate what previously looked like a ‘bull flag’ formation on the various wheat charts. On the other hand, technical support associated with nearby futures’ respective 10-day moving averages apparently limited losses. September CBOT wheat futures fell 7.75 cents to $5.775/bushel in late Wednesday trading, while July KC wheat sagged 3.25 cents at $5.83/bushel, and September MWE slumped 4.5 to $6.19.
Deteriorating cash expectations continued their pressure on CME futures Wednesday as the livestock complex was widely lower. Seasonal demand lulls, prospects of increased feed costs due to uncertainty in the grains, and generalized global financial concerns likely contributed to the onslaught. Technically, it appears that the long-term rally that began with the late Feb low of 138 cents/pound is losing traction as the nearby has stayed below the 40-day moving average of 150.88 in recent weeks. August cattle futures dropped 1.80 cents to 149.00 cents/pound Wednesday, while December futures lost 1.3 cents to 153.55. Meanwhile, August feeder cattle futures plunged 3.1 cents to 213.62 cents/pound, and November feeders fell 2.72 to 209.85.
Lean hog futures followed the rest of the livestock market lower Wednesday. It’s not surprising to see somewhat of a pullback post Fourth of July as traders anticipate the demand pressure. Turmoil in the Chinese stock markets is probably not helping matters much as investors worry about the waning of Chinese demand due to financial setbacks. As well, often lean hog futures can trade at a significant discount to cash hogs, which fell sharply recently. Conversely, the lean hog index turned higher late last week and is expected to come in at 78.07 tomorrow, perhaps suggesting growing support. August hog futures lost 0.47 cents to 75.80 cents/pound Wednesday, while December slid 0.92 cents to 62.77.