Cattle market soared to fresh highs Wednesday

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Soy losses seemed to limit corn gains Wednesday. The corn market began Wednesday on a firm note, possibly due to a slight reduction in forecasts for South American rainfall later this week. However, prices set back from early highs as the soybean complex came under renewed pressure. March corn closed 1.25 cents higher at $4.2625/bushel Wednesday afternoon, while May rose 0.75 to $4.33/bushel.

Cash weakness and technical issues dominated soy trading. Talk of the accelerating Brazilian harvest reportedly sent Gulf soy quotes downward Wednesday morning, which in turn spurred selling at the CBOT. The March bean future drop below chart support at its 200-day moving average around midday, but later bounced on an apparent combination of short-covering and bargain hunting. Soyoil values remained under pressure from the overnight Asian palm oil decline. March settled 1.0 cent lower at $12.795/bushel as trading ended Wednesday, while March soyoil dropped 0.26 cents to 37.84 cents/pound, but March soymeal bounced $2.9 to $419.4/ton.

The wheat markets remained generally firm. Talk of improving export demand supported wheat futures Wednesday, especially after Algeria tendered to buy 500,000 tonnes in the early morning hours. Traders seemingly remain concerned about the damage being done to U.S. winter wheat, since severe cold and Southern Plains dryness have emerged as factors lately. However, the Chicago market did seem to suffer from spillover soy weakness. March CBOT wheat futures slid 1.0 cent to $5.6125/bushel at their Wednesday settlement, while March KCBT wheat futures rallied 3.5 cents to $6.2475, and March MWE futures ran up 3.0 to $6.1675.

Another cash surge sent cattle futures soaring. Spiking beef prices apparently caused beef packers to pay $147/cwt for fed cattle Wednesday afternoon. That news sparked a fresh jump in CME futures, with prices across the complex at record highs. The market may lose upward momentum, especially if wholesale prices stall or reverse to the downside. February cattle futures rocketed up 2.12 cents to 143.67 cents/pound at their Wednesday close, while April futures soared 1.57 to 141.80. Meanwhile, March feeder cattle futures leapt 2.05 cents to 170.37 cents/pound, and May jumped 1.50 to 171.50.

February hog futures moved lower. Recent slippage by the exchange index have caused CME swine traders to worry that the cash markets won’t be able to justify nearby futures premiums. Modest cash gains posted Tuesday may have partially alleviated those concerns, but today’s wholesale weakness seemingly reinforced bearish fears. February hogs tumbled 0.42 cents to 85.55 cents/pound as CME pit trading ended Wednesday, while June gained 0.15 to 102.00.

Cotton proved relatively weak Wednesday. Cotton futures had recently rallied strongly in response to talk of tight U.S. supplies and reduced 2014 Chinese plantings. However, prices dipped overnight in apparent reaction to the latest Chinese news. They are reportedly considering the use of price targets, with a reliance on international prices in supporting their domestic market. Given the size of global supplies, that might prove long-term bearish. March cotton skidded 0.29 cents to 87.84 cents/pound just before noon (EST) Wednesday, while July cotton sank 0.24 cents to 87.67.

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