Corn futures dipped along with the other ag commodities Wednesday morning, with optimism about the forthcoming harvests apparently weighing upon the markets. Traders are reportedly starting to adjust and balance their positions ahead of the Friday morning WASDE report. May corn slipped 1.5 cents to $7.075/bushel in overnight trading, while December slumped 1.5 cent to $5.50.
Soybeans paused Tuesday night after having risen significantly over the previous week. The recent move was largely powered by bullish export news, since numerous international customers were apparently forced to come to the U.S. while Brazil struggles to get its massive crop to port and onto ships. Many also expect the USDA to cut its forecast soybean carryout on the Friday morning WASDE report. May soybeans edged 1.5 cent higher to $14.68/bushel early Wednesday morning, while May soyoil rose 0.11 cents to 50.24 cents/pound and May meal inched $0.2 higher to $436.1/ton.
Wheat futures apparently remain vulnerable to the negative price implications of the ongoing series of weather systems sweeping across the U.S. That is, they are bringing much needed moisture to the main crop growing regions, with the Winter Wheat Belt benefitting substantially from the precipitation. We would also point out that ABARE, the Australian counterpart to the USDA, predicted its forthcoming wheat crop will post a 13% annual increase, thereby adding significantly to global supplies during the coming months. May CBOT wheat futures lost 4.25 cents to $7.0175/bushel in pre-dawn action, while May KCBT wheat dropped 5.25 cents to $7.3975, and May MGE futures declined 2.5 cents to $7.9325.
Cattle futures continued sliding despite supportive wholesale news. Choice cutout jumped another 2.91 cents/pound Tuesday afternoon in reaction to an apparently belated grocer rush to buy as the grilling season looms next month. Choice values have spiked well over 10 cents over the past two weeks, which certainly suggests producers will be able to persuade beef packers to boost country prices again later this week. The fact that futures have not also rallied is sending a decidedly negative signal to pragmatic traders. April cattle slid 0.25 cents to 129.37 cents/pound early Wednesday morning, while August fell 0.27 cents to 124.87. Meanwhile, April feeder cattle dropped 0.75 cents to 142.90 cents/pound and August tumbled 0.80 cents to 152.20.
The large Tuesday afternoon drop in pork cutout dragged hog futures lower again overnight. Rib and belly values were virtually unchanged, but the other cuts, especially loins and hams suffered sizeable losses. This seemingly bodes ill for the short-term swine outlook, despite the fact that cash hog values have seemingly been firming this week. Futures are very oversold, but that is no guarantee of a quick rebound. April hogs lost 0.40 cents to 78.85 cents/pound in early Wednesday trading, while June skidded 0.42 cents at 89.12.
Cotton futures proved the exception to the bearish rule early Wednesday morning by sustaining it recent upward push. However, the rise was quite limited, possibly by comments made by a high ranking Chinese official overnight. He indicated that rising costs may cut its annual cotton consumption from 10 to 8 million tonnes in the foreseeable future. On the other hand, he also said China is unlikely to cut the price it is paying for cotton for its domestic stockpile this year. May cotton climbed 0.27 cents to 87.25 cents/pound in early Wednesday trading, while December gained 0.07 cents to 85.81.