After holding up remarkably well in the face of bearish developments Wednesday, corn futures declined early Thursday morning. The modest drop can probably be blamed upon news that a large corn tender from a South Korean firm will be sourced from South America, thereby suggesting U.S. corn remains uncompetitive on the international market. May corn slipped 2.0 cents to $6.395/bushel in early morning action, while December dipped 0.5 cent to $5.39.
Soybean futures reportedly proved vulnerable to concurrent financial market weakness Wednesday and continued slipping Wednesday night. Legume values are probably feeling downward pressure from the South American markets, especially with Brazil reportedly getting on top of its logistical problems getting the record crop shipped overseas. The overnight rise in the value of the U.S. dollar could make American beans even less competitive with their South American counterparts at this juncture. May soybeans fell 1.5 cents to $13.7875/bushel in pre-dawn Thursday trading, while May soyoil rose 0.07 cents to 49.22 cents/pound, whereas May meal declined $1.2 to $396.8/ton.
Hopes for increased export demand and disappointingly light Tuesday rains over the Southern Plains apparently boosted wheat futures Wednesday, but futures set back overnight. A lack of domestic bidders for Indian government stocks dedicated to the export market suggest that country will soon be forced to lower its asking prices in order to reduce its massive inventories probably dragged markets downward. Having the U.S. dollar post a large overnight surge did not help the American market either. May CBOT wheat futures slid 2.0 cents to $6.945/bushel early Thursday morning, while May KCBT wheat lost 3.0 cents to $7.3225 and May MGE futures skidded 1.5 cents to $7.90.
Anticipation of another cash market advance today or Friday probably boosted live cattle futures in early morning trading. However, the fact that choice cutout rose only slightly and the select cuts declined may account for the limited gains posted overnight. Actually, a look at their charts shows the nearby cattle contracts are current stuck between support associated with their 10 and 20-day moving averages (MAs) and resistance around their 40-day MA. It may take a significant cash market move to push them out of that range in the short term. June cattle rose 0.27 cents to 123.47 cents/pound in trading early Thursday morning, while December edged 0.10 cent higher to 129.65. May feeder cattle futures surged 0.52 cents to 147.10 cents/pound, and August gained 0.30 cents to 153.80.
The hog market was decidedly mixed Wednesday night. That apparently reflected the conflict between significant cash gains yesterday and the late-afternoon report of sizeable wholesale losses. The fact that spring and summer futures are trading at substantial premiums to the CME lean hog index may be limiting their upside potential at this point. May hog futures slipped 0.25 cents to 89.90 cents/pound in overnight electronic trading, while June inched 0.02 cents higher to 92.50.
Cotton futures rallied modestly Wednesday despite large financial, energy and metal market losses. However, prices suffered a setback overnight. Traders are rather obviously hoping for bullish results on the weekly USDA Export Sales report due out later this morning, but sustained U.S. dollar strength may be militating against increased sales. May cotton had fallen 0.19 cents to 89.03 cents/pound in early Thursday morning electronic action, while December dropped 0.52 cents to 87.72.