Corn market extends losses on Wednesday
After surging in response to wholesale price gains Tuesday, live cattle futures seemed set to build upon the advance today. But that was not the case, as exemplified by decidedly mixed closes posted by the 2013 contracts. One has to wonder if the fact that Monday’s large deliveries (115 lots) were retendered rather than being kept or demanded by packers weighed upon nearby futures. In addition, having so many reclaimed (87 lots) suggests those deliveries could be hanging over the market during the days ahead. Choice cutout also declined, although that news may have been partially offset by the concurrent rise in select values. February cattle futures declined 0.15 cents lower at 131.80, while the April contract climbed 0.22 to 135.75 cents/pound.
Wednesday news concerning the hog and pork complex seemed less than supportive of CME futures, since both cash and wholesale quotes were down somewhat. Late-morning news that heavy hams were called steady-to three cents lower was not friendly. The intra-day reversal suffered by live cattle futures probably weighed on the swine market as well, as did projections for a substantial drop by the CME index. However, fund buying reportedly came on top bullish supply forecasts for 2013, thereby sparking a dramatic surge in Wednesday afternoon trading. Such ideas may eventually prove correct, but we have to wonder if today’s buying was premature. February hogs jumped 1.35 cents to 85.65 and June surged 1.0 cent at 100.05 cents/pound.
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