Corn futures were probably set to bounce in the wake of recent declines, so it was not terribly surprising to see yellow grain prices rise after the weekly Energy Information Administration report Wednesday morning. It indicated that U.S. ethanol production surged 2.5% last week, thereby implying increased demand for corn. May corn gained 1.75 cents to $6.4025/bushel just before lunchtime Wednesday, while December rose 1.75 cents to $5.245.
Tight spot markets and a positive basis continued supporting soybean futures Wednesday morning. However, reported unwinding of soybean corn spreads and technical selling of the nearby contracts apparently dragged bean futures downward. That was rather surprising, especially when viewed within the context of the large canola acreage reduction forecasts by Statistics Canada (their version of the USDA) and the bullish soyoil reaction. May soybeans slipped 4.75 cents to $14.15/bushel Wednesday morning, while May soyoil surged 0.45 cents to 49.02 cents/pound, and May soybean meal dipped $3.6 to $408.1/ton.
News that Statistics Canada had raised its forecast of Canadian wheat this spring apparently depressed wheat futures Wednesday morning. Talk of increased production in Europe and Australia did not help the bullish cause either. Conversely, news that the frost that hit the Southern Plains Tuesday night was quite severe apparently supported the Kansas City market for hard red winter wheat. May CBOT wheat futures tumbled 5.75 cents to $6.9175/bushel around midsession Wednesday, while May KCBT wheat slipped 3.25 cents to $7.34 and May MGE futures slumped 2.75 cents to $8.125.
Ideas that warming weather will boost demand for beef, as well as the wholesale strength early this week seemed to spark fresh buying in cattle futures Wednesday morning. Cattle traders are very likely looking for short-term cash strength if beef prices keep rising during the days and weeks just ahead. The discounts built into summer futures probably encouraged buying as well. June cattle climbed 1.02 cents to 121.85 cents/pound just before the lunch hour Wednesday, while December gained 1.02 cents to 127.27. May feeder cattle futures jumped 1.50 cents to 141.10 cents/pound, while August soared 2.27 cents to 150.40.
Despite divergent indications concerning country hog prices Wednesday morning, hog futures rallied in concert with cattle. As in the cattle pit, anticipation of a spring demand surge almost surely powered the futures advance. The fact that the most-active June contract smashed through chart resistance associated with its 40-day moving average probably exaggerated the early rise. May hog futures climbed 0.62 cents to 88.45 cents/pound around midday Wednesday, while the June contract surged 1.35 cents to 90.92.