Short-covering seemed to come into the crop markets Tuesday night. Anticipation of a record U.S. corn crop and good results for other crops has exerted persistent downward upon the various futures markets lately. However, with the USDA Crop Production and WASDE reports looming just two days away, traders appeared to start covering previously established short positions overnight. We can probably expect mixed trading until the reports are released. December corn futures bounced 0.25 cent to $4.2525/bushel Tuesday night, while May gained 0.25 cents to $4.435.
The soy complex posted a mixed showing in early Wednesday trading. As in the corn pit, soybean and product prices rose modestly overnight. Indeed, oil prices rose overnight, but dipped in response to significant weakness in Asian palm oil values. Again, the gains probably reflect a wave of short covering ahead of Friday’s big reports. January soybean futures rose 2.0 cents to $12.5225/bushel around dawn Wednesday, while December soyoil edged 0.03 cents lower to 41.12 cents/pound, and December soymeal added $0.7 to $393.6/ton.
The wheat markets moved generally higher as well last night. Friday’s Crop Production reports should limited application to the wheat markets, since the September reports probably captured the situation quite well. Still, the WASDE report may hold some significant surprises, so bearish traders in those markets also appeared to be lightening their positions Tuesday night. December CBOT wheat futures rebounded 3.0 cents to $6.59/bushel in early Wednesday trading, while December KCBT wheat futures inched up 1.0 cent to $7.235, and December MWE futures moved up 2.5 to $7.1625.
Tuesday afternoon beef weakness seemed to set the stage for mixed overnight trading. Although select beef cutout rose Tuesday, the headline number for choice values declined. That probably discouraged bulls looking for cash strength later this week. December cattle futures did rise 0.10 cents to 132.15 cents/pound early Wednesday morning, but the closely watched April futures crept up 0.02 to 134.17. January feeder cattle gained 0.02 cents to 165.10 cents/pound, while March feeders dipped 0.05 cents to 164.90.
Concerted cash and wholesale losses depressed hog futures in early Wednesday action. Although hog traders realize this is often a weak period for the hog and pork complex, Tuesday’s across the board weakness in the cash and wholesale markets weighed rather heavily upon CME prices last night. December hog futures sank 0.42 cents at 87.82 cents/pound as Wednesday’s trading day got underway, while April tumbled 0.40 to 93.25 cents/pound.