Grain markets finished well on Wednesday

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After rising Tuesday, corn futures proved able to sustain their upward momentum Wednesday. Recent talk of domestic supply tightness have apparently provided considerable support. Wire service reports indicating more liquid conditions at elevators and ethanol plants seemed to undercut prices around midsession, but surging soybean and wheat futures seemingly carried corn upward as well. May corn rose 4.0 cents to $7.325/bushel at its Wednesday settlement, while December gained 4.75 cents to $5.66.

Soybean futures rallied Wednesday, thereby seemingly reflecting trader expectations about Chinese actions after they canceled a large number of Brazilian orders (due to its logistical problems and resulting delays) earlier in the week. An examination of possible Chinese options after rescinding their purchases naturally suggested they would come to the U.S. for at least a portion of those shipments. May soybeans surged 13.0 cents to $14.1925/bushel late Wednesday afternoon, while May soyoil climbed 0.32 cents to 49.80 cents/pound, while May meal moved up $2.2 to $413.8/ton.

Persistent talk of vigorous wheat demand from both the domestic and export sectors boosted futures again Wednesday. Given the relative weakness of wheat prices when compared to the cost of corn, the traditional spring-summer harvest decline seems likely to be relatively small, which may be supporting the market. May CBOT wheat futures jumped 14.0 cents to $7.36/bushel as it closed Wednesday, while May KCBT wheat added 12.50 cents to $7.64, and May MGE futures leapt 11.75 cents to $8.095.

After initially declining in reaction to weak cash news, cattle futures rallied rather sharply Wednesday. Cattlemen across the Great Plains apparently took 124-125 cents/pound for their cattle late Tuesday afternoon, which represented 1-2 cent declines from last week. The subsequent Chicago rebound may have represented a ‘sell the rumor, buy the fact’ trader response to the news. Bulls may also have been reacting to talk that the Senate was working to avoid sequester furloughs of USDA meat inspectors. A deal was announced after the close. April cattle closed 0.75 cents higher, at 126.05 cents/pound, Wednesday afternoon, while August advanced 0.95 cents to 123.22. However, feeder futures remained under pressure. April feeders sank 0.72 cents to 137.75 cents/pound, and August lost 0.10 cents to 147.15.

Hog futures proved rather mixed Wednesday. The surprising strength exhibited by cattle futures may have boosted their summer counterparts in the swine pit. Conversely, nearby futures seemed vulnerable to talk of persistent cash and wholesale weakness. Wire service reports also cited weak export demand for undercutting the hog and pork complex. On the other hand, their large rebounds from early lows may inspire technical buying during the days just ahead. April hogs fell 0.35 cents to 77.87 cents/pound at its Wednesday close, while June rose 0.22 cents to 88.50.

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