Corn edged higher Wednesday night. Wire service reports cited Wednesday’s USDA cut in its predicted U.S. corn carryout to just under 2.0 billion bushels for overnight CBOT firmness. We suspect bullish leadership from the soybean pit, as well as technical support just above short-term moving averages, are supporting corn futures. March corn futures gained 0.5 cent to $3.9425/bushel early Thursday morning, while July added 0.75 to $4.0925.
Talk of torrid demand continues supporting the soy complex. As expected, the USDA boosted its estimate of 2014/15 U.S. soy exports and cut the carry-out forecast on Wednesday’s WASDE report. Forecasts for fine South American weather and large Brazilian and Argentine crops may have sparked the subsequent CBOT reversal, but bulls returned to the bean and product markets last night. January soybean futures bounced 3.0 cents to $10.35/bushel in early Thursday trading, while January soyoil rallied 0.19 cents to 31.94 cents/pound, and January meal rose $0.7 to $369.8/ton.
The WASDE numbers are still weighing on the wheat markets. The USDA continued its recent pattern of boosting estimates of global wheat stockpiles Wednesday, which weighed on grain futures. Prices bounced on talk of a fresh Egyptian tender, since they were looking for U.S. wheat. However, traders now worry that high prices will again cause a U.S. shutout. March CBOT wheat closed slumped 6.25 cents to $5.755/bushel Wednesday night, while March KC wheat sank 5.25 cents to $6.1225/bushel and March MWE wheat stumbled 4.0 to $6.005.
Nearby cattle futures bounced from early Wednesday lows. As suspected, Tuesday’s late drop in choice beef cutout weighed heavily upon early CME cattle trading. Big equity market losses may also spurred Wednesday’s selling. However, the nearby contracts staged a comeback, trading around unchanged levels later in the day. Afternoon GLOBEX trading suggested a weak opening today. February live cattle slipped 0.20 cents to 162.85 cents/pound as Wednesday’s CME trading ended, while April gained 0.30 to 162.90. January feeder cattle futures plunged 1.17 cents to 231.60 cents/pound, and January feeders stumbled 0.10 to 227.25.
Spot weakness undercut hog rally attempts yesterday. The CME hog index looks likely to rise slightly again when officially quoted today, which probably inspired traders to start looking at the long side, especially with the nearby contracts trading at discounts. However, the midday spot market reports indicated sizeable losses, thereby seeming to short-circuit the advance. The afternoon reports looked somewhat more supportive. February hog futures ended Wednesday having skidded 0.05 cents at 84.55 cents/pound, while June hogs climbed 0.35 cents to 92.65.
The WASDE’s bullish US numbers may be supporting cotton futures. The WASDE report reduced estimates of 2014 U.S. cotton production and the 2015 and carryout, whereas the industry was expecting sizeable increases. The bullish domestic data was apparently offset by predicted increases in global supplies, which weighed on prices. However, ICE futures rebounded overnight, which probably reflected the tighter U.S. situation. March cotton futures advanced 0.41 cents to 59.98 cents/pound shortly after dawn (EST) Thursday and the July contract climbed 0.43 to 61.35.