Bean gains diverged from grain losses Tuesday night

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Corn futures slipped Tuesday night. After rallying modestly the past two days in response to Monday’s USDA reports, the corn market set back somewhat overnight. There seemed to be little substantive news, which suggests technical factors and profit-taking played a role in the slide. May corn dipped 2.5 cents at $5.05/bushel early Wednesday morning, while December declined 1.75 to $5.0375.

Talk of supply tightness continues supporting the soy complex. Little fresh news concerning soybeans emerged last night, but traders seem quite happy to continue buying in reaction to the tightness of the domestic situation. The Asian palm markets also built upon yesterday’s big oil surge, which probably helped power the CBOT follow-through. Meal appears to be suffering from being on the wrong side of the crush spread for the moment. May soybeans advanced 7.5 cents to $14.92/bushel in early Wednesday trading, while May soyoil leapt 0.76 cents to 42.16 cents/pound, but May soymeal slipped $0.4 to $482.3/ton.

Improved weather forecasts are still depressing the wheat markets. Significant portions of the central U.S. got rain overnight and more precipitation is expected later in the day. When combined with the potential for good rains by mid-month, it isn’t terribly surprising to see wheat futures suffer another round of losses Tuesday night. May CBOT wheat futures dove 9.25 cents to $6.76/bushel in predawn Wednesday action, while May KCBT wheat futures tumbled 9.25 cents to $7.4425 and May MWE futures lost 5.75 cents to $7.295.

Cattle futures posted surprising gains Tuesday night. Worries about the short-term cash and wholesale outlook seemed to depress CME cattle prices lately, with futures declining yesterday despite firming midday beef quotes. Cutout values actually ended the day much lower, but that seemingly did little to deter a wave of buying overnight. That suggests renewed cash market optimism. June cattle futures gained 0.52 cents to 137.00 cents/pound as Wednesday dawned over Chicago, while December was steady at 140.00. Meanwhile, May feeder cattle rose 0.32 cents to 177.10 cents/pound, and August ran up 0.42 to 178.80.

Hog traders are likely awaiting developments. Persistent cash market advances have pushed country quotes well above nearby futures, which pulled them higher yesterday. However, suspicions that cash values are peaking seemed to weigh upon prices overnight, especially after the weekly Iowa-Southern Minnesota report put weights at a record high. June hog futures sank 0.17 cents to 127.42 early Wednesday morning, while December rallied 0.25 to 91.40.

Chinese news may be weighing upon cotton futures once again. Cotton futures have not performed well this week, with traders apparently selling aggressively after the market responded poorly to Monday’s supportive USDA data. Prices stabilized overnight, but took on a bearish cast when Chinese officials announced that they had sold 80% of an offering out of government stocks (the first after they lowered their base price). May cotton edged up 0.15 cent to 92.22 cents/pound just after sunrise (EDT) Wednesday, while December cotton slid 0.03 to 79.84.

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