Favorable weather forecasts are depressing crop futures

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Favorable weather forecasts apparently depressed crop futures Wednesday morning. Although this week’s rains are clearly delaying plantings, the latest forecasts imply another big planting window next week. Wire service reports suggested most farmers could complete their corn seedings as a result, which would probably improve fall harvest prospects. Corn futures declined along with beans and wheat. July corn sank 5.25 cents to $4.975/bushel in Wednesday morning action, while December slumped 4.0 cents to $4.91.

Talk of accelerated plantings may also be undercutting soybeans and meal. The likely opening of another wide planting window next week could enable farmers to complete a major portion of their planned soybean seedings, thereby improving fall production potential. Thus, while Asian palm strength is supporting soyoil values, beans and meal are taking it on the chin this morning. July soybeans tumbled 11.75 cents to $14.72/bushel around midsession Wednesday, while July soyoil rallied 0.21 to 41.42 cents/pound, and July soymeal fell $6.1 to $478.6/ton.

Weather news is weighing on wheat markets as well. The southern Plains are reportedly getting some greatly needed rainfall this week, which is apparently weighing heavily upon winter wheat futures today. Conversely, next week’s anticipated dryness will apparently allow farmers to accelerate spring wheat plantings in the Northern Plains. Thus, MWE prices are also under pressure. July CBOT wheat futures had plunged 18.75 cents to $6.905/bushel by late Wednesday morning, while July KCBT wheat futures dove 17.5 cents to $8.0725, and July MWE futures dropped 18.5 to $7.7625.

Cattle futures seem to be belatedly reacting rising beef values. Big discounts built into nearby cattle futures show traders are anticipating sizeable seasonal losses during the coming weeks. That may also explain the muted Tuesday reaction to big wholesale beef gains. However, futures are surging today, which probably reflects talk of sustained wholesale strength today. June cattle advanced 0.77 cents to 137.77 cents/pound shortly before lunchtime Wednesday, while December rallied 0.77 to 145.05. Meanwhile, August feeder cattle jumped 1.22 cents to 192.90 cents/pound, and October surged 1.12 cents to 193.60.

Wholesale gains may have sparked fresh CME hog strength. Cash hog prices proved quite strong Tuesday, but the Chicago market reaction was probably limited by concurrent wholesale weakness. In contrast, pork prices rose strongly this morning, which apparently exaggerated bullish ideas about the short-term outlook. June hogs soared 2.85 cents to 122.45 cents/pound in late Wednesday morning action, while December jumped 0.77 to 95.07.

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