Rising Black Sea tensions are supporting the crop markets

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Rising Black Sea tensions are supporting the crop markets. Sources have proven that Russian forces are in eastern Ukraine. Meanwhile rebel forces have reportedly occupied the important port town of Mariupol, which may slow the flow of Ukrainian grain to the world market. Corn is less affected than wheat, but that region does produce a lot of the yellow grain as well. September corn rallied 1.0 cent to $3.57/bushel Wednesday night, while December added 1.0 to $3.66.

Demand strength and Black Sea news sparked soy buying Wednesday night. Wednesday’s big rebound in nearby soymeal values illustrated the underlying strength of soy demand, so the overnight gains posted overnight weren’t terribly surprising. The soy complex is probably seeing spillover buying from the Black Sea situation as well. September soybean futures advanced 4.25 cents to $10.8575/bushel early Thursday morning, while November futures gained 3.75 cents to $10.275. September soyoil rose 0.02 cents to 32.69 cents/pound, and September soymeal surged $6.5 to $423.0/ton.

The wheat markets are clearly reacting to the Black Sea situation. The Ukraine/Russia situation seems to be deteriorating, with one major consequence potentially being a substantial reduction in wheat exports from that region. Wheat prices are probably going to continue reacting to news from the Black Sea for the foreseeable future. September CBOT wheat surged 6.25 cents to $5.535/bushel soon after dawn Thursday, while September KC wheat ran up 8.0 cents to $6.36/bushel, and September MWE wheat climbed 8.25 to $6.185.

Cattle futures are trading mixed to higher. Cattle futures seemed vulnerable to overnight losses after Wednesday’s beef data disappointed, but nearby futures rose slightly instead. Traders apparently hold divergent ideas about the fall outlook, since current CME discounts run counter to the market’s history of seasonal strength. October live cattle futures lifted 0.25 cents to 148.07 cents/pound early Thursday morning, while December futures edged up 0.12 to 150.90. Meanwhile, September feeder futures inched 0.07 cents higher to 214.55 and November futures crept up 0.15 to 210.37.

Big pork losses are weighing on the hog market. Although the cash hog markets did not decline all that substantially Wednesday afternoon, pork cutout values fell sharply. Those reports badly undercut ideas that the complex is putting in a late-summer bottom. October hogs dove 1.00 cent to 94.92 cents/pound in early Thursday action, while December tumbled 0.92 to 89.57.

Cotton futures are now testing support. Cotton continues suffering from a general lack of news, so technical traders are playing big roles in daily action. Thus, after having seen the most-active December contract top its 40-day moving average the past two days, renewed selling is now testing that pivotal point from above. The market’s ability to hold at that level could pivotal to the short-term outlook. December cotton futures slumped 0.61 to 66.85 cents/pound shortly after sunrise Thursday, while March futures dropped 0.61 cents to 67.20.

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