Hog futures were the exception to general ag market strength

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Corn bounced from technical support Wednesday night. After trending upward in response to demand strength and dryness over the central U.S. lately, corn joined the other crop markets in dropping yesterday. Ongoing rains and forecasts for much more of the same apparently sent them lower. However, yellow grain prices bounced back overnight, which seemingly reflected the emergence of strong buying at moving average support. May corn climbed 4.5 cents at $5.0025/bushel early Thursday morning, while December added 4.5 to $5.015.

The soy complex also rebounded overnight. Wednesday’s soy breakdown was seemingly triggered by improved moisture prospects for the central U.S. and by widespread profit-taking on previously established longs. However, the old crop situation apparently remains quite tight, so it isn’t terribly surprising to see futures rising again this morning. May soybeans surged 11.0 cents to $14.7325/bushel in predawn Thursday trading, while May soyoil ran up 0.55 cents to 41.40 cents/pound, and May soymeal gained $2.9 to $479.4/ton.

Short-covering also seemed to support the wheat markets. Improved precipitation prospects for the U.S. and Australia have powered the recent drop in wheat prices. However, concurrent corn and soy strength seemed to spark modest short-covering in the golden grain markets last night. On the other hand, they still look technically weak. May CBOT wheat futures edged up 1.25 cents to $6.705/bushel in early Thursday action, while May KCBT wheat futures stabilized at $7.3875 and May MWE futures rose 2.0 cents to $7.2425.

Firming beef prices are supporting cattle futures. CME traders worry that the cattle and beef complex will suffer a sizeable seasonal drop during the days and weeks just ahead. However, wholesale prices have firmed lately, thereby suggesting nearby futures trading at substantial discounts are priced too low. June cattle futures rallied 0.25 cents to 137.02 cents/pound Wednesday night, while December lifted 0.10 to 140.37. Meanwhile, May feeder cattle increased 0.35 cents to 178.30 cents/pound, and August rose 0.35 to 179.92.

Cash weakness is weighing upon the hog market. Although the hog and pork situation now seems extremely tight, many in the industry are not convinced prices can be sustained at current extraordinary highs. Pork prices rose again Wednesday, but country hog prices fell. The latter news apparently triggered fresh CME selling overnight. June hog futures plunged 1.70 cents to 123.10 cents/pound as Thursday dawned over Chicago, but December gained 0.05 to 91.45.

Cotton futures were narrowly mixed Wednesday night. Little news concerning the white fiber emerged overnight and the equity and forex markets seemed rather quiet. Thus, the early lack of movement in the cotton market isn’t particularly surprising. May cotton crept up 0.04 cents to 91.55 cents/pound just after sunrise (EDT) Thursday, while December cotton slipped 0.09 to 79.62.

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