Corn futures closed higher on Wednesday. The market was supported by fund buying as the dollar index was solidly lower and equities were stronger today. While weather conditions have improved in Argentina, the market seems to be finding support from ideas that the crop will be much smaller than early season projections due to drought during much of the growing season. March ended 3 cents higher at $6.42 and May was 3 cents higher at $6.48 1/4.
Soybean futures traded solidly higher on Wednesday. The market was supported by a report from USDA that China purchased 4.4 million bushels of U.S. soybeans. Soybean basis levels were firm due to tight supplies at the gulf available for shipment. Weakness in the dollar index and strength in the stock market were also bullish factors. While weather has improved in Brazil and Argentina this week, earlier crop stress will hamper yield potential and could push some additional export demand to the U.S. March closed 16 1/4 cents higher at $12.15 1/4 and May was 15 3/4 cents higher at $12.24 1/4.
Wheat futures were higher on Wednesday. The rally was driven in part by continued talk that Russia will soon take action to curb exports. A cold snap in parts of Europe and the former Soviet Union has possibly caused significant winterkill to the wheat crop due to inadequate snow cover. Weakness in the dollar index and strength in equities were also supportive factors. CBOT March ended 8 1/4 cents higher at $6.74 1/4, KCBT March was 7 cents higher at $7.22 1/2 and MGE March closed 9 cents higher at $8.36 3/4.
Cattle futures closed higher on Wednesday. Short-covering and outside market support pushed futures higher today. Cash trade has not yet developed this week but there was talk that short-bought packers could decide to hold bids steady this week despite processing margins that are deep in the red. February ended 85 cents higher at $125.70 and April was 65 cents higher at $129.23.
Lean hog futures traded higher on Wednesday. The $1.26 increase in pork cutouts on Tuesday and mostly steady cash bids supported futures. Packer margins remain poor, but have improved recently. Optimism for improved demand helped rally the market. Outside markets were also supportive as the dollar index was lower while the stock market was higher. April closed $1.48 higher at $90.35 and June was 73 cents higher at $98.95.