Ag markets diverged significantly again Wednesday morning
Corn futures consolidated gains Wednesday morning. The corn market rallied from short-term moving average support Tuesday. However, the bounce did not carry prices back above their mid-February highs, which is seemingly causing traders to have second thoughts about trying to push the market higher in the days just ahead. News of a sizeable Tuesday corn sale provided modest support. March corn edged up 1.0 cent to $4.5675/bushel late Wednesday morning, while May rose 0.75 to $4.62.
The soy complex is proving decidedly mixed at this point. Talk of the tight U.S. situation and reduced South American production forecasts have been supporting the soy complex, but the bean and meal markets have apparently lost their upward momentum. Beans are trading mixed this morning, whereas oil surged in response to big Asian palm gains. Traders are now concerns about spreading dryness in Southeast Asia. Meal seems to be suffering from its position on the wrong side of the crush spread. March soybeans gained 2.75 cent to $14.0175/bushel in late Wednesday morning action, while March soyoil leapt 0.70 cents to 41.28 cents/pound, and March soymeal dropped $3.9 to $465.7/ton.
The wheat markets turned generally lower Wednesday morning. Traders seem concerned about export demand for U.S. wheat after Egypt’s cancellation Tuesday. One also has to suspect traders are less worried about winter freeze damage to winter wheat after seeing last night’s relatively moderate Midwest lows. March CBOT wheat futures sank 7.25 cents to $6.0775/bushel around midsession Wednesday, while March KCBT wheat futures dipped 3.75 cents to $6.8675, but March MWE futures rallied 2.25 to $6.7625.
Bullish expectations are boosting cattle futures. The wholesale markets built upon Monday’s big gains Tuesday afternoon. Anticipation of that news probably boosted cattle futures. The Chicago market follow through strongly to the upside this morning, thereby suggesting the bulls are now convinced cash prices will rise sharply again this week. April cattle futures had jumped 1.37 cents to 143.77 cents/pound by late Wednesday morning, while August gained 0.50 to 132.17. Meanwhile, March feeder cattle ran up 0.70 cents to 171.77 cents/pound, and May advanced 0.67 to 174.05.
Rising cash and wholesale prices are also powering nearby hog futures. Cash hog and pork prices have surged lately, with strong demand seeming to be a major factor. Traders are looking for much more of the same, especially if/when forthcoming supplies fall short of year-ago levels. However, deferred futures set back by late morning, thereby suggesting underlying weakness. April hogs climbed 0.82 cents to 101.40 cents/pound late Wednesday morning, while June declined 0.42 to 108.52.
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