Late Federal Reserve news sent stocks and commodities higher

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Fed news boosted the commodity markets Wednesday afternoon. Strength spilling over from the soybean pit offered support for corn futures, but the onset of the southern Corn Belt harvest appeared to undercut prices earlier in the day. However, afternoon news that the Federal Reserve will not taper its bond buying to support the economy sent the markets higher. Concurrent U.S. dollar weakness also boosted commodities. December corn closed 2.25 cents higher at $4.5675/bushel Wednesday afternoon, and May rose 2.25 cents to $4.77.

Soybeans rebounded from Tuesday losses in Wednesday action. Soybean traders were greeted with news of a big U.S. soybean sale to China and another sizeable sale to an unknown buyer Wednesday morning, which powered a general advance. The gains were later exaggerated by the Fed news. November soybeans rallied 5.25 cents to $13.4775/bushel in late Wednesday trading, while October soyoil jumped 0.47 cents to 42.47 cents/pound, but October soymeal sagged $1.8 to $427.0/ton.

Wheat futures apparently rose in concert with the commodity sector Wednesday. The reasons behind early wheat strength weren’t obvious, but soybean strength probably played a significant role in the rise. Thus, it wasn’t terribly surprising to see wheat quotes rise along with the other commodities when the Fed announced that it would not reduce its bond buying program in the near future. December CBOT wheat gained 3.5 cents to $6.465/bushel at its Wednesday settlement, while December KCBT wheat lifted 2.25 cents to $6.925, and December MGE futures edged up 0.75 cent to $7.0025.

Cattle futures also closed strongly today. Although cattle and beef values traditionally tend to rally during late summer and fall, recent beef slippage had short-circuited rally attempts. That was also true in early Wednesday trading, but the afternoon Fed news and the subsequent commodity sector advance and U.S. dollar decline encouraged bullish traders. October cattle futures edged up 0.10 cents to 125.27 cents/pound late Wednesday afternoon, while December added 0.30 to 128.95. Meanwhile, October feeder cattle climbed 0.42 cents to 158.30 cents/pound, and January inched ran up 0.42 cents to 158.92.

Hog futures also posted a bullish reversal Wednesday. Hog and pork prices had recently disappointed CME hog traders, thereby undercutting futures in early trading. However, underlying cash and wholesale firmness, as well as the Fed news, pushed Chicago swine values significantly higher later in the day. October hog futures surged 0.75 cents to 91.72 cents/pound in late Wednesday action, while December lifted 0.42 cents to 87.95.


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