Corn futures settled slightly higher Tuesday. Prices edged higher on forecasts for warmer and drier weather in South America. Brazil is in need of rain currently, while Argentina’s conditions are good but forecasts for drier weather are unfavorable. That strength was weighed down by the bearish outside markets as the stock market pulled back and the dollar index moved higher. Traders were cautiously optimistic about news coming out of Europe, but that sentiment seems to have changed. March was 1/2 of a cent higher at $5.94 1/2 and May was 3/4 of a cent higher at $6.03 1/4.
Soybean futures ended higher Tuesday. Short-covering following Monday’s dip to a new low in the January contract lifted prices today. The market was weighed down by the stock market turning lower and the value of the dollar strengthening. Traders are watching reports out of South America, but the news has been mixed for soybeans, with some people talking about record crops while others say yields are being hurt by dry weather. Actual production prospects should become clearer in the next several weeks. January was 6 1/2 cents higher at $11.18 1/2 and March was 6 3/4 cents higher at $11.29.
Wheat futures closed higher Tuesday. Buyers stepped in to cover short positions after wheat futures have pulled back considerably the last few months. There has been talk of the market putting in a bottom in a market that many consider to be oversold. Gains were limited by bearish outside markets, with the stronger dollar a particular concern for wheat. Market fundamentals remain generally bearish. CBOT March was 6 1/4 cents higher at $6.00 1/2, KCBT March was 3 3/4 cents higher at $6.56 and MGE March was 6 1/2 cents higher at $8.30.
Cattle futures finished mixed Tuesday. Nearby futures were pressured by the poor packer margins, which will likely keep a lid on cash cattle prices as packers work to improve margins. Adding pressure to futures was the turn-around in outside markets as stocks weakened and the dollar moved higher. Adding support was the rebound in the choice cutout by more than $4 on Monday. No activity is expected in the cash market until Wednesday at the earliest. December was 55 cents lower at $117.90 while February was unchanged at $118.65.
Lean hog futures ended mostly lower Tuesday. The surplus of hog supplies has been pressuring prices, which have been unseasonably high the last few months. Futures tumbled in conjunction with falling cash market prices and lower cutouts, which continue to be the main driver for futures contracts. In addition, the chart patterns are decidedly negative. Hog supplies are high, with slaughter running ahead of year-ago levels. Typically hog prices hold steady to lower in late December and then improve after the beginning of the year. This year the February contract is essentially even with current cash prices, indicating a negative bias by traders. At least for the near term, hog futures will have a hard time getting much upward momentum. December was 43 cents lower at $85.80 and February was 20 cents lower at $86.40.
Cotton futures finished mixed Tuesday. Nearby contracts bounced on short-covering after dropping to new one-year lows. Weakness in the stock market and strengthening in the value of the dollar weighed on cotton futures. March was 15 points higher at 87.31 cents.