Ag markets turned mixed Thursday morning

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The grain markets remained strong Thursday morning. Although the equity index set back from their early highs and the dollar bounced from its lows, numerous commodity markets, including corn futures, sustained their bullish reactions to Wednesday’s Fed news. Ultimately, expectations for improved demand in the changed environment are supporting commodity values. December corn climbed 4.25 cents to $4.6025/bushel around midsession Thursday, and May rose 3.75 cents to $4.77.

Soybeans turned mixed by late Thursday morning. Despite the supportive implications of the Fed announcement that it will not taper its quantitative easing program in the near future, as well as the financial market reaction to it, soybean and product futures were mixed in Thursday morning action. The weekly Export Sales report also seemed modestly bullish. We suspect improved Corn Belt weather has robbed soybeans of upward momentum, especially after futures had risen so sharply since early August. November soybeans dropped 10.0 cents to $13.3775/bushel late-morning trading Thursday, while October soyoil gained 0.04 cents to 42.51 cents/pound, and October soymeal skidded $3.3 to $423.7/ton.

Wheat futures also sustained their post-Fed rally. The wheat market rallied in concert with corn Thursday morning. Indeed, the golden grain surge largely easily exceeded those posted in the corn pit. That may stem from expectations for much improved export demand, since many felt that high U.S. prices would limit sales to a glutted global market this winter. The strong result on the weekly Export Sales report probably reinforced those ideas. December CBOT wheat jumped 13.0 cents to $6.595/bushel just before lunchtime Thursday, while December KCBT wheat surged 11.5 cents to $7.04, and December MGE futures moved up 9.25 cents to $7.095.

Cattle futures also rallied in response to the Fed announcement. Modest wholesale gains probably played a role in subsequent CME strength, the Fed news has probably been the main driver of the Chicago rise. That is, rising equity markets and dollar weakness are thought to encourage domestic and foreign beef demand, respectively. October cattle futures advanced 0.47 cents to 125.75 cents/pound as the lunch hour loomed Thursday, while December added 0.55 to 129.50. Meanwhile, October feeder cattle bounced 0.45 cents to 158.75 cents/pound, and January improved 0.50 cents to 159.42.

Cash weakness seemingly undermined hog futures again Thursday morning. Hog futures also posted a bullish reaction to the bullish implications of Wednesday Fed news. However, CME prices have since declined. That probably reflects disappointing results cash market losses Wednesday, as well as mediocre calls this morning. October hog futures sagged 0.32 cents to 91.40 cents/pound as trading accelerated Thursday morning, while December dipped 0.40 cents to 87.55.


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