After opening weakly, corn futures surged Wednesday morning. First came the daily grain report indicating private exporters had sold 540,000 tonnes of new crop corn to China and other unknown destinations. That was followed by the weekly Energy Information Administration report showing ethanol production accelerated last week. These suggest underlying corn demand remains strong despite the elevated cost. July corn jumped 14.75 cents to $6.5475/bushel late Wednesday morning, while December climbed 7.5 cents to $5.2775.
Although active farmer selling has reportedly eased the old crop soybean situation somewhat lately, soy futures proved quite firm again Wednesday morning. That probably reflects strength spilling over from the corn market, as well as reported firmness in the Asian palm oil markets Tuesday night. Traders of nearby meal futures may be expecting recent farmer sales to accelerate the crush. July soybean futures edged up 4.75 cents to $14.83/bushel around midsession Wednesday, while July soyoil gained 0.09 cents to 49.57 cents/pound, but July soybean meal slipped $0.7 to $438.0/ton.
There seemed to be little fresh news concerning wheat Wednesday morning, although some traders may have responded to a private forecast of 2013/14 global production below the recent USDA prediction. Otherwise, the golden grain markets almost surely benefited from concurrent corn gains. July CBOT wheat futures leapt 10.0 cents to $6.905/bushel in Wednesday morning trading, and July KCBT wheat advanced 9.5 to $7.48, whereas July MGE futures declined 2.25 cents to $8.1125.
The ongoing advance in wholesale values seemed to support cattle futures early Wednesday, which probably reflected trader ideas that producers would demand higher prices for their cattle as a consequence. However, cattle futures apparently turned downward in response to surging grain and soy prices. U.S. dollar strength may also have weighed upon the CME market. June cattle sank 0.42 cents to 120.67 cents/pound just before lunchtime Wednesday, while December slid 0.30 to 124.90. Meanwhile, August feeder cattle futures fell 0.85 cents to 145.62 cents/pound, and November tumbled 1.20 cent to 150.80.
Anticipation of seasonal strength through mid-June apparently supported CME lean hog futures again Wednesday morning, especially with wholesale prices continuing their seasonal advance. Traders may now believe the usual pre-Memorial Day slide often seen in the hog and pork complex will not occur this year. June hog futures rose 0.60 cents to 93.00 cents/pound late Wednesday morning, while December futures added 0.42 cents to 79.02.
After breaking down badly on Tuesday, cotton futures rebounded early Wednesday morning. The strength spilling over from the grain and soy complexes may also have encouraged buying, as did the equity market surge to fresh records. However, the U.S. dollar proved very strong as well, which may explain the cotton market setback from early highs. July cotton futures had fallen 0.07 cents to 83.79 cents/pound around midday Wednesday, while December gained 0.54 cents to 84.69.