Ag markets seemingly suffered from a Wednesday night malaise

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Corn futures were part of a general commodity decline Wednesday night. Although traders still talk of strong demand as being supportive of the corn outlook, yellow grain prices dipped overnight. Nearby futures reached overbought levels yesterday, which may have rendered it and the other crop markets vulnerable to a general financial market decline this morning. March corn slipped 1.75 cents to $4.52/bushel early Thursday morning, while May skidded 2.0 at $4.5825.

Soybeans backed away from late-Wednesday gains. After declining in response to fresh concerns about Chinese cancelations of soy shipments Wednesday, soybean futures bounced yesterday evening. However, beans and meal turned lower in early Thursday trading. As with corn, overbought conditions may have rendered the market vulnerable to short-term weakness despite supportive fundamental conditions. March soybeans slumped 2.75 cents to $13.515/bushel in predawn Thursday action, while March soyoil rallied 0.24 cents to 40.48 cents/pound in concert with Asian palm gains, and March soymeal tumbled $2.8 to $450.2/ton.

The wheat markets also suffered from the overnight malaise. Traders are still concerned about the potentially negative impact of the frigid weather expected over the Central U.S. next week, but those worries seemed to persuade few to buy futures aggressively. That is, wheat futures also moved generally lower Wednesday night, with only the Kansas City market posting significant gains. March CBOT wheat futures sagged 1.5 cents at $6.1875/bushel in early Thursday trading, while March KCBT wheat futures added 1.75 cents to $6.9425, and March MWE futures lost 2.0 to $6.82.

Cattle futures may suffer a technical slide in the short term. Beef prices continued this week’s strong bounce Wednesday, but cattle futures suffered badly after failing to sustain an early breakout attempt. Thus, the market seems vulnerable to a short-run test of underlying support. Much depends upon the outcome of this week’s cash trading. April cattle futures slid 0.17 cents lower at 141.65 cents/pound around dawn Thursday, while August declined 0.30 to 131.22. Meanwhile, March feeder cattle inched down 0.05 cents to 171.12 cents/pound, and May fell 0.42 to 172.65.

Pork weakness may be hampering hog market bulls. Cash hog prices reportedly rose strongly Wednesday, thereby seeming to justify widespread CME optimism about the spring outlook. However, pork cutout fell rather sharply, which apparently weighed upon futures last night. April hogs rose just 0.05 cents to 97.25 cents/pound early Thursday morning, while June stabilized at 107.50.

The financial markets may be depressing cotton prices. The equity markets suffered surprisingly large losses Wednesday afternoon and continued sliding overnight. In contrast, the U.S. dollar has rebounded from recent lows. Both of those shifts hold negative implications for future apparel demand, so it isn’t terribly surprising to see cotton futures trading weakly at this point. March cotton edged 0.25 cents lower to 86.72 cents/pound just after sunrise (EST) Thursday, while July cotton sank 0.23 cents to 87.60.

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