Wednesday’s soy reversal weighed on corn futures. The corn market seemed to power higher today, especially with the soy complex leading the way higher. However, bullish bean traders couldn’t sustain early gains, with the reversal sending a decidedly bearish technical signal as well. That apparently spurred bullish profit-taking in corn. December corn futures settled 3.0 cents lower at $3.53/bushel Wednesday afternoon, while May sagged 2.5 to $3.76.
Traders cited profit-taking and hedge pressure for Wednesday’s bean drop. Talk of strong Chinese sales, a slow U.S. harvest and poor Brazilian conditions helped send the soy complex strongly higher this morning. Wire service sources cited bullish profit-taking and hedge pressure for the surprising reversal in bean and meal prices. Whatever the cause, the failed November bean push above its 40-day MA could spur aggressive technical selling. November soybean futures ended Wednesday 1.5 cents lower at $9.6275/bushel, while December soyoil climbed 0.38 cents to 32.14 cents/pound, and December soymeal slumped $4.9 to $338.0/ton.
Fund short-covering may have supported wheat futures. The wheat markets were seemingly pulled upward by concurrent corn and soy gains this morning, which made the golden grains’ late firmness in the face of their counterparts’ losses that much more surprising. We have to suspect the various funds continue liquidating their huge short positions, thereby explaining the sustained strength. December CBOT wheat gained 3.0 cents to $5.2225/bushel in late Wednesday trading, while December KC wheat rose 3.0 cents to $6.0525/bushel, but December MWE wheat slid 0.25 to $5.6875.
Surprising beef gains may have boosted cattle futures. The livestock/meat industry has recently been expecting wholesale beef weakness through late October. That pessimism may have opened CME futures up to today’s strong reaction to modest beef gains posted at midday. December live cattle futures advanced 1.05 cents to 168.10 cents/pound as Wednesday’s pit session ended, while April futures rallied 1.13 to 165.77. Meanwhile, November feeder cattle futures surged 1.25 cents to 235.17 cents/pound and January feeders vaulted 1.02 cents to 229.27.
Hog market bulls seemingly think futures have anticipated seasonal losses. Hog futures are trading at large discounts to the CME lean hog index, thereby reflecting widespread seasonal and cyclical bearishness. Indeed, today’s early cash and wholesale news was not friendly. Still, futures rallied sharply, thereby possibly reflect trader suspicions that the seasonal breakdown has been fully anticipated. December hog futures jumped 1.30 cents to 89.75 cents/pound late Wednesday afternoon, while April hogs leapt 2.05 to 89.30.