Forecasts for summery weather in late August boosted the grain markets overnight. Parts of the Corn Belt have been surprisingly dry recently, so traders worry that a burst of additional heat will reduce harvest prospects. Conversely, other areas could use the heat to hasten crop maturity. September corn rose 3.75 cents to $4.685/bushel early Thursday morning, while December edged up 2.0 cents to $4.5725.
The weather forecast also boosted the soy complex Thursday morning. Given its greater responsiveness to August weather, the forthcoming soybean crop might be significantly diminished by excessive heat and dryness later this month. Thus, it wasn’t at all surprising to see soybean and meal prices surge. In addition, news of Asian palm oil gains rather obviously sparked substantial gains in the oil pit. September soybeans climbed 6.5 cents to $12.76/bushel as trading accelerated Thursday morning, while November beans added 7.0 to $12.46. September soyoil surged 0.20 cents to 42.54 cents/pound, and September soymeal crept up $3.1 to $411.0/ton.
The wheat markets followed corn and beans higher again Wednesday night. Bulls in the wheat pits are being hampered by forecasts for massive global production during the coming crop year, but U.S. prices would probably benefit if corn and soybean supplies fall short of expectations. Thus, prices at the three Midwest exchanges generally rose in concert overnight. September CBOT wheat lifted 2.75 cents to $6.3325/bushel in early Thursday trading, while September KCBT wheat inched 1.25 cents higher to $7.00, and September MGE futures advanced 4.25 cents to $7.4025.
Cattle futures added slightly to modest Wednesday gains this morning. Wednesday’s midday report indicated considerable strength in wholesale beef values, which translated into gains in the CME pit. The afternoon report was even more favorable, which probably explains the persistent strength witnessed overnight. October cattle futures gained 0.07 cents to 128.25 cents/pound early Thursday morning, while December moved up 0.02 cents to 130.02. September feeder cattle improved 0.20 cents lower to 157.65 cents/pound, but November was unchanged at 160.40.
Lean hog futures slipped slightly as Thursday dawned in Chicago. Technical strength in the wake of Wednesday’s breakout above resistance probably accounts for the current firmness, but traders probably aren’t happy with the fact that both the cash and wholesale sectors suffered substantial losses Wednesday. October hog futures skidded 0.05 cents to 88.10 cents/pound Wednesday night, while December was steady at 84.67.
Cotton futures remained weak overnight after sliding Wednesday. Cotton futures seemed to stall on negative Chinese import news and technical considerations Wednesday. Moreover, weather forecasts suggest dry areas of Texas could receive improved rainfall later this month, which would certainly be welcomed by cotton farmers. We suspect the crop market gains provided renewed support in early Thursday trading. December cotton futures bounced 0.10 cents to 91.65 just after sunrise Thursday, while March dipped 0.13 cents to 88.82.