Corn prices are trading modestly higher midday. The market is taking a breather after Tuesday’s rally on news that dry conditions in South America are worsening. Weather forecasts and reports coming in show dry conditions quite severe expected to continue in both Argentina and parts of Brazil, which has rallied the corn futures market and will keep prices strong. The nearby contract blew through the resistance at $6.26 and may now challenge the next technical resistance at $6.43. The lower stock market is weighing on corn. March is 2 1/4 cents higher at $6.35 1/2 and May is 2 1/4 cents higher at $6.43 1/2.
Soybean futures are trading lower at midsession. Profit-taking from Tuesday’s rally is weighing on futures this morning. Adding pressure are the stronger dollar and the pullback in the stock market. The weakness is also blamed on technical factors. While there is concern about the soybean crops in the Southern Hemisphere, the problems have not had much of an impact on actual demand for U.S. soybeans yet. Soybean futures prices are considered to be oversold, but prices will probably rebound if weather conditions in Brazil and Argentina don’t improve soon. January is 8 1/4 cents lower at $11.91 1/2 and March is 8 1/2 cents lower at $12.01.
Wheat futures are trading modestly higher at midday. Wheat has rallied to a 7-week high, moving above its 100-day moving average, which is positive technically. However, there is little new fundamental news to move the market, and wheat is keeping a close eye on corn as more wheat has been priced into feed rations. In general, weather conditions are relatively good for 2012 wheat production with increasing snow cover in Ukraine. Longer term wheat prices will fall if it looks like we are headed for big crops in key wheat producing countries, but for right now the price trend is up. CBOT March is 2 3/4 cents higher at $6.47 1/2, KCBT March is 1 3/4 cents higher at $6.97 1/2 and MGE March is 1 1/4 cents higher at $8.63 3/4.
Live cattle futures prices are trading mixed at midday. Nearby prices have pulled back following last week’s short covering rally. Adding pressure is the light mid-holiday demand and the shortened work week ahead of the New Year making demand hard to gauge. Showlists for this week indicate more cattle are available to the cash market which may tend to temper any significant increase in cash prices, but some buyers have low inventories, especially in the South where trade volume last week was very low. However, no significant cash trade activity is expected before Thursday. February is 20 cents lower at $123.00 and April is 5 cents higher at $126.60.
Lean hog futures are trading higher at midsession. The cash market is lending support to futures. Cash hog prices were up by more than $1 per cwt in the Western Corn Belt and the cutout was 44 cents higher on Tuesday to $86.29. Hog prices usually improve from their December lows all the way into spring. Plants will be closed Monday reducing the number of hogs needed for next week, but a large slaughter is expected for Saturday, Prices dropped on Dec. 8 leaving a gap of about 50 cents from $97.50 to $98 for the June contract. There is a good chance prices will move up to fill that gap over the next few sessions. February is 60 cents higher at $86.35 and April is 45 cents higher at $89.20.
Cotton futures are trading strongly higher at midday. Futures are rallying on reports of a meeting being held today by the Trading Corporation of Pakistan to fix a market support price for those who purchase lint from the ginners. Buyers are scurrying to secure cotton needs now in fear that the price will be set higher than current levels. The market has hit limit-up gains several times this morning, and is hovering not far below that level. China has recently stepped up imports to rebuild reserves. March is 365 points higher at 91.56 cents and May is 36 points higher at 91.45 cents.