The slow harvest and tight conditions continue supporting crop futures. Talk that the rail situation is creating tightness despite the slow harvest boosted the grain and soy markets again Wednesday night. The fact that the December corn contract topped its 100-day moving average yesterday is also encouraging bulls. December corn futures climbed 3.75 cents to $3.79/bushel early Thursday morning, while May rose 3.75 to $4.0075.
The soy complex also posted modest Wednesday night gains. The tight supply situation for soybeans and meal apparently continued supporting those markets last night. Soyoil seemed caught between divergent palm and crude oil moves. Beans and meal set back significantly from Wednesday evening highs. November soybean futures gained 2.0 cents to $10.45/bushel in predawn Thursday trading, while December soyoil inched up 0.04 to 34.22 cents/pound, and December soymeal added $2.3 to $399.5/ton.
International concerns are boosting the wheat markets. Wheat futures probably benefited from persistent support spilling over from the corn and bean markets last night, but traders now seem more focused upon conditions that could reduce production to come out of Australia and the Black Sea region. December CBOT wheat advanced 6.25 cents to $5.445/bushel Wednesday night, while December KC wheat moved up 4.75 cents to $6.1125/bushel, and December MWE wheat rallied 4.0 to $5.865.
Cattle futures proved weak at Wednesday’s close. Beef prices surged again yesterday, which may have played a role in the rebound posted just after pit trading commenced. However, bulls couldn’t sustain the move, thereby suggesting a lack of industry confidence about the late-2014 outlook. Late-afternoon losses in deferred futures suggest a weak opening today. December live cattle futures ended Wednesday having fallen 1.02 cents to 166.75 cents/pound, while April futures slid 0.22 to 165.55. Meanwhile, November feeder cattle futures sank 0.60 cents to 233.05 cents/pound, and January feeders dropped 1.10 cents to 227.95.
Ongoing cash losses weighed on CME hogs Wednesday. Although yesterday’s noon pork quotes recovered some of Tuesday’s big losses, the cash markets remained under pressure. Indeed, with the CME index expected to drop to 94.61 cents/pound today, the cash breakdown has greatly reduced discounts built into nearby futures. Chicago prices traded mixed in late trading, which suggests a similar opening this morning. December hog futures plunged 1.60 cents to 88.60 cents/pound at Wednesday’s close, while April hogs fell 0.45 to 89.10.
Cotton futures dipped in Wednesday night action. Cotton industry sources suggest recent price losses will spur short-term cotton demand for export. Still, it’s rather clear that recent soy, grain and equity strength helped push nearby December cotton over its 40-day moving average yesterday. But cotton actually set back overnight, which we’re inclined to blame on concurrent losses in equity index futures. December cotton futures sagged 0.30 cents to 65.05 cents/pound around dawn Wednesday, while March futures slipped 0.13 cents to 63.09.