Grain markets under pressure on Wednesday

Corn futures are trading lower this morning. Corn prices followed soybean futures lower during the overnight session. Prices are expected to trade choppy as the market reacts to USDA’s large cut to 2011/12 ending stocks and increased production and yield forecasts by private brokerage firm FC Stone. As of this writing, December corn is trading 4 cents lower.

Soybean futures are trading lower this morning. The market is now down for the third consecutive day. Liquidation by both commercial and non commercial traders is preventing the market from reaching a point of stability. Private projections for better than expected soybean yields and increased production output is also weighing on the market. Another day of sharp losses in the palm oil market has the potential to pull futures lower again today.

Wheat futures are trading lower this morning. Wheat futures are down for the third consecutive day. Spillover pressure from the soy complex continues to plague the wheat market along with weak demand for U.S. wheat. Strength in the dollar index and favorable rains across the U.S. Plains will keep prices trading defensively during the day session.

Live cattle futures are called to open higher this morning. Cattle futures are expected to open pit trade on the upside, supported by strength in wholesale beef prices and higher cash prices. Both select and choice cuts were reported higher on Tuesday. Cash trade has yet to develop but prices are expected to trade steady to $2 higher than the previous week.

Lean hog futures are called to open higher this morning. Market prices are expected to open with strength supported by higher cash prices and a higher pork carcass value. Processor margins are good and so demand by packers should remain steady. Also, the fundamentals of the market continue to improve, providing underlying support for prices.

Cotton futures are trading slightly higher this morning. Prices are being supported by short covering on sharp losses due to selling pressure. However, strength in the dollar index and news that Chinese cotton imports may decline by 50 percent this season could limit today’s gains.

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