The crop markets posted a Tuesday-night bounce. Little fresh news emerged overnight, thereby suggesting the general rebound in the various crop markets was largely technical in nature. On the other hand, some wire service sources argue that recent corn and wheat losses will reinvigorate demand. July corn rose 2.0 cents to $4.6025/bushel in early Wednesday action, while December gained 2.0 cents to $4.5625.
The soy complex is leading the way higher once again. It’s not terribly surprising to see soy futures leading the crop markets higher this morning, since Tuesday’s nearby soybean losses seemed overdone. Traders are very likely focused upon yesterday’s July close just above its 40-day moving average, which may have set the stage for a larger advance. Soyoil is proving surprisingly strong in the face of continued Asian palm weakness. July soybeans surged 12.5 cents to $14.9375/bushel early Wednesday morning, while July soyoil jumped 0.37 cents to 38.72 cents/pound, and July soymeal ran up $4.3 to $503.9/ton.
Wire service reports cited better demand for overnight wheat gains. A few stories concerning the international wheat trade were published Tuesday night, but they didn’t seem particularly pertinent to the current U.S. situation. Still, prices rebounded significantly from their Tuesday closes. Again, we think technically inspired buying is playing a role. July CBOT wheat futures climbed 4.75 cents to $6.1725/bushel Tuesday night, while July KCBT wheat advanced 5.0 cents to $7.1275 and July MWE futures moved up 4.5 cents to $6.89.
Beef strength continues supporting CME cattle futures. Grocery industry buyers traditionally increase their wholesale beef purchases early in most months as they prepare for features early in the month following. That’s probably the current case as well, especially with Independence Day looming. That may partially explain this week’s beef gains, as well as concurrent CME strength. August cattle edged up 0.02 cents to 140.10 cents/pound as Wednesday dawned over Chicago, while December added 0.15 cents to 146.52. Meanwhile, August feeder cattle advanced 0.45 cents to 198.75 cents/pound, and October gained 0.07 to 199.35.
Cash slippage seems to be weighing on Chicago hogs. Although the hog/pork industry is anticipating a big summer rally as seasonally strong demand is met by supplies truncated by piglet losses to PEDV disease, the cash markets refused to cooperate Monday. Weakness in the eastern Corn Belt seemed particularly telling and likely spurred CME selling overnight. August hog futures dipped 0.25 cents to 127.40 cents/pound in early Wednesday trading, while December slumped 0.42 to 94.32.
Cotton seems to be following the crop markets upward. As has routinely been the case lately, little cotton news emerged overnight, so traders continue focusing on the tight old crop situation and improving production prospects for the new crop. July futures topped a pivotal chart point Tuesday, but December still seems vulnerable. July cotton rallied 0.17 cents to 87.53 cents/pound shortly after sunrise Wednesday, while December cotton rose 0.23 to 78.33.