Ag markets could not escape general commodity decline
Corn futures were under considerable pressure early Wednesday morning, due in part to a continuation of the Tuesday decline. A negative report on Chinese manufacturing activity and a bearish commodity complex reaction weighed upon prices as well. However, bears proved unable to sustain the downward pressure, since nearby futures had climbed back toward unchanged levels by the end of the day. The potential for persistent planting delays seemingly accentuated the rebound. July corn settled just 3.25 cents lower at $6.4675/bushel late Wednesday morning, while December had slipped 6.25 cents to $5.505.
Soybean futures remained under strong downward pressure Wednesday. The drop was reportedly powered by a weak manufacturing report that emerged from China overnight, as well as the generally bearish commodity environment that dominated trading. The potential for major shifting of Corn Belt acreage from corn to beans may also be weighing upon the legume complex. July soybean futures plunged 26.0 cents to $13.73/bushel at its Wednesday close, while July soyoil dove 0.37 cents to 48.85 cents/pound and July soybean meal dropped $10.1 to $404.4/ton.
Wheat proved unable to avoid the general commodity decline Wednesday, although priced did finish well above their morning lows. Trader surprise that wheat tour results for northeast Kansas matched the five-year average may have weighed upon prices early, whereas talk of more frost over the next two nights and preliminary reports from western Kansas may have brought wheat futures back. July CBOT wheat futures had fallen 10.0 cents to $7.21.0/bushel at the Wednesday afternoon close, while July KCBT wheat skidded 7.25 cents to $7.8225 and July MGE futures lost 6.25 cents to $8.1575.
Cattle futures rose early Wednesday in response to the wholesale strength depicted by the Tuesday afternoon cutout report. The CME gains then accelerated when the midday beef quotes were published, since choice cutout jumped 2.51 cents to 198.90 cents/pound. That is close to the highs posted last year (although well below record 2003 highs). June cattle surged 0.57 cents to 122.47 cents/pound by late Wednesday afternoon, while December gained 0.22 cents to 127.57. August feeder cattle futures ended the day weakly, losing 0.02 cents to 148.87 cents/pound, while November advanced 0.27 cents to 153.47.
CME lean hog followed through modestly upon their strong Tuesday gains Wednesday. The big wholesale decline posted late Tuesday was reversed on the midday pork report. Thus, bullish expectations about the spring outlook seem well grounded at this point. However, trader may prove reluctant to build upon bullish positions in the wake of the broad commodity decline suffered today. June hog futures closed 0.37 cents higher, at 92.95 cents/pound, Wednesday afternoon, whereas December futures skidded 0.40 cents to 78.50 to end the day.