Corn prices are expected to open 3 cents to 8 cents higher on Wednesday. Soybeans have taken over price leadership in the crop markets and soybean prices are set for significant gains at the open on Wednesday. The outlook for the corn market remains mixed with a bullish scenario for old-crop but a relatively bearish outlook for 2012/13. Developments in outside markets are generally positive for corn, with the stock market probably headed higher and weakness in the value of the dollar.
Soybean prices are forecast to open 15 to 25 cents higher. The soybean market was very strong in overnight trade with several contracts soaring to new highs. Soybean market fundamentals are strong and most contracts have broken out to the upside on long-term charts. Reports of yields in Argentina even lower than expected coupled with frost damage to late maturing crops have made the outlook for the U.S. soybean market even more bullish.
Wheat prices are expected to open 5 to 10 cents higher Wednesday. Wheat prices continue to benefit from the gains in corn and soybean markets. However, with the recent price moves, the wheat charts of taken on a much more positive tone. Since bottoming out at about $6.32 last week, the September contract has gained more than 20 cents. The weakness in the value of the dollar may help the wheat market some, but the big gain in soybean prices is the major factor in the strong wheat market open.
Cattle prices are called 50 cents to $1 higher. Cattle prices collapsed late in the session on Tuesday as word leaked out about the discovery of a cow with BSE. However, with a little more time to consider how the news will affect the market, traders decided that the sell-off was overdone. Overnight cattle futures trader higher due to short covering and some traders getting back into the market. We will still need to see how both domestic consumers and foreign buyers react before we know how big an impact the discovery will have on prices, but at this point it looks like the damage may be minimal.
Hog prices are forecast to open 20 to 50 cents higher. Hog prices took a nosedive late in the trading session on Tuesday in response to the discovery of a cow with BSE. The reaction was probably overdone and there is some chance that a BSE problem in the cattle market would actually boost demand for pork. Cash hog prices and the pork cutout were a little higher on Tuesday and expected gains in the stock market and a weaker dollar should also provide support for hog futures early Wednesday.
Cotton prices are expected to open 50 to 75 points higher on Wednesday. Cotton futures traded higher overnight with increasing concern about planting conditions. It has been hot and dry in the Texas high plains area and poor conditions persist in Georgia and other states along the East coast. There was also news in the market from China showing that farmers in China will reduce cotton area by about 10 percent in 2012, significantly less than the 17 percent reduction touted earlier. Cotton prices have been trending down since early February, but July futures are up against the downtrend line and could breakout to the upside. Weather over the next couple of weeks could have a significant impact on prices.