Cattle futures underperformed the other ag markets
A forecast for reduced South American crops boosted corn futures Tuesday. Talk of demand strength and technical factors supported corn futures Tuesday morning. That set the stage for a bullish response to an industry forecast for reduced corn production out of Brazil and Argentina this spring. CBOT prices rose significantly, but the follow-through rise was surprisingly modest. March corn rallied 6.0 cents to $4.4175/bushel at Tuesday’s close, while May added 6.0 to $4.4775.
Talk of spreading Brazilian dryness seemingly sent the soy complex higher. The soy complex also traded firmly this morning, but seemed doomed when an industry firm forecast a net increase in South American production during the coming weeks. However, bean and product futures kept marching upward, which may have reflected idea that dryness in the coffee and cane growing regions of Brazil will spread to the southern grain/soy growing areas. March soybeans jumped 20.5 cents to $13.1325/bushel Tuesday afternoon, while March soyoil bounced 0.26 cents to 37.71 cents/pound, and March soymeal leapt $13.0 to $447.0/ton.
Fears for the winter wheat crop boosted those markets Tuesday. Wheat traders are reportedly becoming concerned about the hard red winter wheat crop due to recent lack of rainfall in the southern Plains, while others worry about freeze damage in the Midwest. General technical firmness and persistent demand strength supported the Minneapolis market as well. March CBOT wheat futures vaulted 20.75 cents to $5.845/bushel at their Tuesday settlement, while March KCBT wheat futures soared 22.25 cents to $6.4625, and March MWE futures surged 12.75 to $6.235.
Cattle traders seemingly turned rather bearish Tuesday. Beef values plunged again Monday, which seemingly bodes ill for the short-term cattle outlook. Bulls apparently threw in the towel by late morning and/or proved unable to power a rebound despite surprising wholesale strength on the midday report. April cattle futures closed 0.50 cents lower at 138.90 cents/pound Tuesday, while August dipped 0.05 cents to 129.55. Meanwhile, March feeder cattle dove 1.02 cents to 166.97 cents/pound, and May tumbled 0.87 to 168.17.
Rebounding cash and wholesale markets sparked Tuesday’s hog rebound. A big Friday drop in pork values apparently triggered Monday’s CME hog sell-off. However, both the cash and wholesale markets posted modest comebacks yesterday, with pork prices rising again at midday. Those developments largely explain the strength seen at the CME Tuesday. April hogs settled 0.27 cents higher at 93.12/pound, while June edged up 0.20 to 103.75.
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