The Black Sea situation seemed to weigh on grains Wednesday night. After having reacted bullishly to Russia’s weekend invasion of Ukraine, the corn and wheat markets have since worked lower. Traders are unsure if the changed situation will disrupt Black Sea exports or cause Ukraine to sell more aggressively in order to raise funds. Corn futures continued Wednesday’s slide overnight. May corn dipped 2.25 cents to $4.7975/bushel in early Thursday action, while December sagged 1.75 to $4.815.
The soy complex proved quite firm in early Thursday action. Although Ukraine is also a major supplier of oilseeds, particularly sunflower seeds and products to the global market, the CBOT soy complex posted across the board gains overnight. Rising Asian palm values probably boosted soyoil futures, whereas traders seemed more inclined to credit late rainfall and the delayed South American harvest for the bean and meal gains. May soybeans rallied 7.25 cents to $14.2775/bushel, while May soyoil climbed 0.27 cents to 43.67 cents/pound, and May soymeal gained $3.1 to $452.7/ton.
The wheat markets also slipped overnight. As in corn futures, uncertainty about the Black Sea situation is dominating trading in the wheat markets at the moment. The Canadian transport situation apparently boosted spring wheat quotes yesterday, but the winter wheat markets were generally weaker. Prices at all three exchanges are modestly lower again this morning. May CBOT wheat futures fell 3.75 cents to $6.3875/bushel Wednesday night, while May KCBT wheat futures lost 4.5 cents to $7.0575, and May MWE futures were flat at $6.8875.
Cattle futures continued their Wednesday slide in early Thursday trading. Despite continued wholesale strength, a tight fed cattle situation and discounted nearby futures, CME cattle prices turned sharply lower yesterday. The decline continued overnight despite late-Wednesday news of continued beef gains. Traders apparently believe country prices are set for a sizeable drop this week and in those following. April cattle futures slumped 0.32 cents to 143.35 cents/pound early Thursday morning, while August tumbled 0.42 cents to 132.97. Meanwhile, April feeder cattle sank 0.37 cents to 173.62 cents/pound, and August dropped 0.35 to 176.07.
Hog futures bounced from Wednesday’s late lows. Hog traders apparently believe the current supply/demand situation remains extremely tight and that cash and wholesale prices will continue rocketing upward during the days and weeks just ahead. However, the cash markets showed signs of weakness Wednesday, so bulls’ ability to sustain large CME premiums is coming into question. Still, prices did rebound overnight. April hogs jumped 1.05 cents to 111.77 cents/pound as Thursday dawned over Chicago, while June advanced 0.85 to 111.60.
Cotton futures seem to be reacting to technical factors. The cotton market exhibited considerable strength late last week and again Tuesday, with concurrent equity gains likely playing a significant role in the rise. ICE futures set back yesterday, but bears couldn’t force prices back below trendline and moving average support. Thus, bulls are hoping for an upside breakout in the days just ahead. May cotton rose 0.37 cents to 88.98 cents/pound just after sunrise (EST) Thursday, while December cotton edged up 0.08 cents to 78.97.