Frigid weather forecasts boosted wheat futures Wednesday night

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Talk of increased feed use seemingly boosted corn prices Wednesday night. The corn market built upon Wednesday’s slight gains last night, with wire service stories citing strong livestock demand for feed in current frigid conditions. Futures may also have been responding to diminished rainfall in the latest South American forecasts. March corn rallied 2.5 cents to $4.2875/bushel early Thursday, while May rose 2.5 to $4.355/bushel.

Drier South American forecasts are probably supporting the soy complex. Soybean tumbled Tuesday in response to predictions of good South American rainfall during the days ahead. However, the latest forecasts indicate less precipitation, which may partially explain the modest soybean gain posted overnight. Meal futures were surprisingly flat, whereas Asian palm strength supported the oil market. March soybean futures gained 5.0 cents to $12.845/bushel in pre-dawn Thursday trading, while March soyoil climbed 0.14 cents to 37.98 cents/pound, and March soymeal inched up $1.6 to $421.0/ton.

Cold weather forecasts are boosting the wheat markets. Talk of robust export demand continues supporting wheat futures, but the main impetus for the Wednesday night gains almost surely stems from the latest weather forecasts. Those reflect fresh predictions for arctic weather over much of the country into early February, thereby increasing the chances for freeze damage to winter wheat. March CBOT wheat futures surged 7.75 cents to $5.69/bushel in early Thursday action, while March KCBT wheat futures jumped 9.0 cents to $6.3375, and March MWE futures ran up 8.75 to $6.255.

Cattle futures remained strong Wednesday night. News that beef packers paid $147/cwt (cents/pound) for fed cattle around noon Wednesday sent CME futures soaring. Afternoon reports of Nebraska trading at $150 probably played a role in the overnight gain. However, traders seem likely to become more cautious after beef prices seemed to stall yesterday. February cattle futures added 0.55 cents to 144.22 cents/pound as Thursday dawned over Chicago, while April futures gained 0.27 to 142.07. Meanwhile, March feeder cattle futures advanced 0.22 cents to 170.60 cents/pound, and May inched up 0.05 to 171.55.

Premiums are hampering bullish efforts in hog futures. The hog and pork markets have proven mixed to moderately stronger in mid-January. However, widespread anticipation of a much larger move has kept CME futures supported at significantly higher levels. Thus, Wednesday’s mediocre cash/pork news is once again weighing upon Chicago prices. February hogs slipped 0.05 cents to 85.50 cents/pound in early Thursday morning trading, while June sagged 0.15 to 101.85.

Technical factors seem to be driving cotton trading. A Chinese cotton industry association released several reports and statements overnight, most of which appeared to have price supportive connotations. However, ICE traders essentially ignored them all, with futures dipping slightly this morning. The fact that nearby futures seemed to post a bearish reversal signal Wednesday may be the factor depressing prices today. March cotton slid 0.17 cents to 87.67 cents/pound just after dawn (EST) Thursday, while July cotton sank 0.29 cents to 87.38.

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