Crop markets appear to be anticipating Friday's WASDE report
Corn futures traded mixed Tuesday night. Little fresh news concerning corn emerged overnight, which seemingly caused the market to stall. Traders may also be taking stock ahead of CONAB reports on Brazilian production tomorrow morning and the monthly USDA WASDE report on Friday. July corn inched up 0.5 cent to $5.18/bushel early Wednesday morning, while December slipped 0.5 cents to $5.09.
Talk of increased South American production is weighing on beans and meal. Brazil’s USDA counterpart CONAB is set to release its latest estimate of that country’s 2013/14 soybean crop tomorrow morning, with many expecting a fresh record. Traders suspect that means more product will flow into the U.S. during the coming weeks, and are apparently selling beans and meal as a result. Asian palm strength is supporting oil futures. July soybeans fell 5.5 cents to $14.54/bushel Tuesday night, while July soyoil gained 0.19 cents to 41.30 cents/pound, and July soymeal sagged $2.5 to $475.0/ton.
The wheat markets slumped in overnight action. The wheat situation still seems bullish with drought dominating the spring winter wheat outlook and excess moisture slowing spring wheat plantings in the north. The Black Sea situation hasn’t improved either. Nevertheless, wheat futures declined last night, with traders possibly looking forward to Friday’s WASDE report. July CBOT wheat futures dipped 3.0 cents to $7.36/bushel in early Wednesday trading, while July KCBT wheat futures dropped 4.75 cents to $8.41, and July MWE futures skidded 1.25 to $8.035.
Late Tuesday beef weakness undercut cattle futures. Cattle futures firmed early this week as traders anticipated strong grocery industry buying of beef as they gear up for planned Memorial Day features. However, beef cutout values fell significantly yesterday afternoon, thereby undercutting those ideas. June cattle slid 0.25 cents to 138.05 cents/pound as Wednesday dawned over Chicago, while December declined 0.20 cents at 144.42. Meanwhile, August feeder cattle rallied 0.20 cents to 191.45 cents/pound, but October sank 0.15 cents to 192.05.
Big wholesale losses sent hog futures lower last night. Although the cash hog markets proved surprisingly firm Tuesday afternoon, the late wholesale reports stated pork values almost 4.0 cents lower on the day. Such huge losses certainly won’t encourage pork packers to pay up for swine during the days ahead. June hog futures dove 1.00 cent to 122.22 cents/pound early Wednesday morning, while December tumbled 0.20 cents to 94.75.
Firming equity markets may be supporting cotton futures. Cotton traders reportedly undertook some long liquidation Tuesday as they began squaring positions ahead of Friday’s USDA WASDE report, but we suspect sizeable equity losses spurred sales as well. In contrast, stock index futures bounced modestly early this morning, which seemingly sparked modest buying in the cotton market as well. July cotton crept 0.01 cent lower to 93.97 cents/pound soon after sunrise (EDT) Wednesday, while December cotton added 0.14 to 84.26.