Crop markets lose upward momentum Wednesday night

decrease font size  Resize text   increase font size       Printer-friendly version of this article Printer-friendly version of this article

A Wednesday morning report indicating U.S. ethanol produced last week at its lowest level in 2 1/2 years caused corn futures to reverse in the wake of gains over the preceding week. The market later came back to finish the day slightly higher; wire service sources cited persistent U.S. dryness and emerging dehydration of Argentine areas for the bounce. However, futures reversed again overnight despite a dearth of news concerning the yellow grain. Still, concerns about persistent dryness over the Central U.S. and Argentina seem likely to continue offering significant support for prices. March corn slipped 2 cents to $7.29 1/4 in early morning trading, while December fell 3 cents to $5.89 1/4 per bushel.

Talk of increasing dryness in Argentina, where shallow-rooted plants might prove especially vulnerable to a heat wave, apparently provided continuing support for soybean futures Wednesday. Technical strength apparently helped power the surge. The fact that the March future was trading above its 40 and 50-day moving averages (MAs) probably inspired considerable buying. However, the advance seemed to lose momentum overnight, especially in light of news that India had imposed a tariff on palm oil imports, which rendered soybean oil that much more attractive. The early-morning slide in that market does not inspire confidence. March beans fell 5 3/4 cents to at $14.30 3/4 in pre-dawn electronic trading, while March soyoil dipped 0.28 cents to 51.03 cents/pound and March meal lost $1.8 to $417.3/ton.

After also performing well in the wake of the January 11 USDA reports, wheat futures also seemed to lose their upward momentum early this morning. Overnight news that India had offered 200,000 tonnes for export conflicted with word that a South Korean firm rejected all offers at its recent 70,000-tonne tender. Ukraine reportedly plans to increase its 2013 wheat imports about 300,000 tonnes (43%), but that wasn’t terribly surprising when viewed within the context of their poor 2012 crop. Ultimately, the Thursday morning weakness may bode ill for short-term prospects, although the mid-morning release of the weekly Export Sales reports could change the situation once again. March CBOT wheat slumped 1 3/4 cents to $7.83 1/4 in overnight electronic activity, while March KCBT wheat declined 2 1/4 cents to $8.40 1/4 and March MGE futures dipped 1 3/4 cents to $8.69 3/4 per bushel.

Feedlot operators across the Great Plains took 1-2 cents per pound less for their cattle Wednesday than they had last week, which had to be a major blow to bullish interests anticipating a quick reversal of recent weakness. Instead, the large Chicago losses that resulted from that news seemed to represent the start of another downward leg on the charts. Having the nearby February contract fail to hold above major technical support at the 130-cent level may also hold major negative implications for the mid-winter outlook. Thus, it was not at all surprising to see cattle futures slip again in early morning trading. February cattle had fallen 0.30 cents to 128.22 cents/pound as the sun was coming up over Chicago, while April had slipped 0.22 cents to 132.47.

Hog futures held up relatively well in the face of the Wednesday cattle breakdown. Differences in their respective cash situations probably account for the disparity, since afternoon USDA reports indicated Corn Belt hog prices at steady-higher levels. Pork prices also rose moderately on strength from pork loin values. Seasonal cash and wholesale gains may support the swine market over the next few weeks, but such hopes might prove forlorn if the long bull market in cattle prices has truly ended. February hogs rose 0.25 cents to 85.40 cents/pound in early-morning action, whereas the June contract was unchanged at 96.65.

The big Wednesday cotton surge may have reflected growing talk that the ongoing Chinese cotton stockpiling program is forcing its textile mills to import cotton and yarn from competitors, since the government buying has rendered domestically produced fiber much less competitive than in the past. Indeed, a wire service story addressing that situation may have boosted ICE futures again in early morning trading. March cotton seems likely to begin the New York trading day 0.09 cents higher, at 77.42 cents/pound, while December may move up 0.10 cents to 79.34.

Prev 1 2 Next All

Buyers Guide

Doyle Equipment Manufacturing Co.
Doyle Equipment Manufacturing prides themselves as being “The King of the Rotary’s” with their Direct Drive Rotary Blend Systems. With numerous setup possibilities and sizes, ranging from a  more...
A.J. Sackett Sons & Company
Sackett Blend Towers feature the H.I.M, High Intensity Mixer, the next generation of blending and coating technology which supports Precision Fertilizer Blending®. Its unique design allows  more...
R&R Manufacturing Inc.
The R&R Minuteman Blend System is the original proven performer. Fast, precise blending with a compact foot print. Significantly lower horsepower requirement. Low inload height with large  more...
Junge Control Inc.
Junge Control Inc. creates state-of-the-art product blending and measuring solutions that allow you to totally maximize operating efficiency with amazing accuracy and repeatability, superior  more...
Yargus Manufacturing
The flagship blending system for the Layco product line is the fully automated Layco DW System™. The advanced technology of the Layco DW (Declining Weight) system results in a blending  more...
Yargus Manufacturing
The LAYCOTE™ Automated Coating System provides a new level of coating accuracy for a stand-alone coating system or for coating (impregnating) in an automated blending system. The unique  more...
John Deere
The DN345 Drawn Dry Spreader can carry more than 12 tons of fertilizer and 17.5 tons of lime. Designed to operate at field speeds up to 20 MPH with full loads and the G4 spreader uniformly  more...
Force Unlimited
The Pro-Force is a multi-purpose spreader with a wider apron and steeper sides. Our Pro-Force has the most aggressive 30” spinner on the market, and is capable of spreading higher rates of  more...
BBI Spreaders
MagnaSpread 2 & MagnaSpread 3 — With BBI’s patented multi-bin technology, these spreaders operate multiple hoppers guided by independent, variable-rate technology. These models are built on  more...

Comments (0) Leave a comment 

e-Mail (required)


characters left

Declining Weigh Blending System

Ranco Declining Weigh (DW) is the standard in fertilizer blending because of the speed and accuracy of the blending process. ... Read More

View all Products in this segment

View All Buyers Guides

Feedback Form
Feedback Form