Corn prices are a little higher early Wednesday morning. A rally in soybean prices is pulling corn futures higher. Corn export sales remain on the low side, but domestic demand appears to be pretty strong. The national average basis is 8 cents under, well below the norm for this time of year. Trade volume is expected to be very light on Wednesday which could allow for spikes in prices. The market will be closed on Thursday and the export sales report will be delayed until Friday.
Soybean prices are up about 5 cents per bushel in early trading. The market was down by 10 cents or more earlier in the overnight trading session but rallied back to post modest gains. There was solid commercial buying on Tuesday suggesting some new export business. The South American weather developments are starting to have a negative impact on soybean futures prices. Very light trade volume is expected Wednesday.
Wheat prices were narrowly mixed early Wednesday morning. The market is torn between the weak export demand and the poor growing conditions for the winter wheat crop. Higher soybean prices are providing a little support for the wheat market. Traders won’t get any more updates on the condition of the winter wheat crop until spring, so the bullish outlook for the supply side may have only limited price impact near term.
Live cattle futures are trading mostly about 25 cents higher this morning. There has been essentially no trade so far in the cash market with bids and offers still about $5 apart. Most expect sales to be delayed until Friday. Feeder cattle prices are mixed Wednesday morning with nearby contracts generally lower. Open interest in live cattle futures is increasing and the consensus that cattle supplies will be tight by the first quarter of 2013 suggests some upward momentum for the market. Concerns about the demand side of the market is dampening the bullish sentiment.
Lean hog futures are trading mixed early Wednesday. Cash prices posted solid gains on Tuesday as packers had to raise bids to get producers to sell. Packers have scheduled big post-holiday slaughter and are still short on covering the hogs they need. Some lean hog futures contracts hit life-of-contract highs on Tuesday and other months were very close. We could see some profit taking and long-liquidation on Wednesday ahead of the holiday.
Cotton prices are about 20 points lower in early Wednesday trading. Cotton futures have been trending higher over the past two weeks, and we could see some profit taking and long liquidation on Wednesday ahead of the holiday. The weekly export report, that will be released on Friday, is expected to show strong sales at last week’s meeting in California. With export sales so far this year down by nearly 30 percent from a year ago, a few weeks of strong sales are needed.