Chinese reports seemingly weighed on grain futures Wednesday night. Little about the domestic markets changed overnight, but Chinese officials published their latest estimates of their domestic grain production overnight. Those indicated increases in corn and wheat production, which may partially explain last night’s CBOT corn slippage. July corn sagged 2.25 cents to $4.9325/bushel early Thursday morning, while December sagged 2.25 cents to $4.8675.
Talk of vigorous demand seemed to support the soy complex last night. China’s main Dalian soymeal contract hit a record high in early Thursday trading, with wire service sources citing strong demand. Given concurrent gains in Asian palm oil values, it isn’t terribly surprising to see the soy complex generally higher this morning. July soybeans rose 0.25 cent to $14.87/bushel around dawn Thursday, while July soyoil gained 0.14 to 41.51 cents/pound, but July soymeal edged $0.4 lower to $486.1/ton.
International developments seemed to depress wheat markets as well. As with corn, news that Chinese officials are anticipating a significant increase in that country’s wheat production appeared to weigh on prices last night. Reports boosting forecasts for European wheat exports may also have encouraged bears. July CBOT wheat futures slid 3.0 cents to $6.8725/bushel in early Wednesday action, while July KCBT wheat futures skidded 1.0 cent to $8.0525, and July MWE futures sank 1.75 to $7.765.
Cattle futures declined on wholesale news Wednesday night. Beef cutout values had surged Tuesday; that provided strong support for CME cattle prices yesterday, since that suggested wholesale values could continue rising this week. However, while select-grade beef was stable yesterday afternoon, choice-cutout fell, which apparently sparked fresh Chicago selling. June cattle slumped 0.22 cents to 137.22 cents/pound as Thursday dawned over Chicago, while December dropped 0.15 to 144.80. Meanwhile, August feeder cattle climbed 0.40 cents to 192.85 cents/pound, and October advanced 0.20 cents to 193.82.
The May futures expiration may have spurred overnight CME hog sales. Cash hog prices rose moderately Wednesday, while pork values posted stronger gains. However, CME futures turned decidedly lower last night. One has to wonder if Wednesday’s expiration of the May contract reminded Chicago traders that the remaining contracts are priced at substantial premiums over spot values. June hogs plunged 1.32 cents to 119.25 cents/pound early Thursday morning, while December lost 0.35 cents to 92.95.
Cotton is still trying to bounce from pivotal chart support. As has so often been the case lately, little substantive cotton news emerged Wednesday night. That again opened the door to other influences, with technicians leading the way. They appeared to buy ICE futures in anticipation of a technical bounce from chart support at the 90-cent level (basis July). Conversely, a breach of that support could trigger strong selling. July cotton bounced 0.44 cents to 91.14 cents/pound shortly after sunrise Thursday, while December cotton rallied 0.31 to 83.19.