Corn futures slipped slightly Wednesday morning despite continued soybean price strength. There was no real news concerning the yellow grain, which may have robbed bullish traders of traction. Ultimately, we suspect the winter storms set to hit the Central Plains tomorrow and again early next week are weighing upon sentiment, since those could significantly diminish the ongoing moisture shortfall existing from the Southern Plains through the Corn Belt. March corn edged 0.5 cent lower to $6.9475/bushel in pre-dawn trading Wednesday, while December dipped 1.5 cents to $5.5675.
Soybean futures followed through on their huge Tuesday surge overnight. Disappointment with weekend rainfall over dry Argentine fields is almost surely playing a big role in the ongoing advance. However, traders should not discount the bullish impact of strong Chinese buying of old-crop U.S. beans over the past few days. We should also point out that weakness in East Asian palm oil prices seemed to weigh upon the soyoil market. March beans surged 11.50 cents to $14.8175 early Wednesday morning, while March soyoil rose just 0.04 cents to 52.57 cents/pound, and March meal climbed $5.0 to $430.3/ton.
Wheat futures proved quite mixed Tuesday night. Buying may have been spilling over from the soybean pit. However, bears were almost surely anticipating the increased production implied by the winter storm entering the Southern Plains this morning, as well as a similar storm early next week. News that China recently bought 400,000 tonnes of Australian wheat and 100,000 tonnes from Canada may have discouraged traders as well, since the U.S. was left on the sidelines. March CBOT wheat futures inched 1.5 cents lower to $7.3075/bushel in Wednesday morning electronic trading, while March KCBT wheat rose 0.5 cent to $7.695 and March MGE futures edged down 0.5 cents to $8.1525.
Cattle futures remained under downward pressure early Wednesday morning. That was rather surprising given the strength exhibited by wholesale beef prices to start this week. Wire service sourced cited the premiums built into nearby futures as the reason for the CME weakness. For example, the most-active April future ended the Tuesday trading session at 129.55 cents/pound, which was about 6.5 cents over consensus prices from the country last week. Suspicions that cash prices may decline again this week may also be weighing upon the market. April cattle sank 0.17 cents to 129.37 cents/pound Tuesday night, while August declined 0.25 cents to 126.35. Meanwhile, March feeder cattle dropped 0.57 cents to 142.60 cents/pound, and August fell 0.43 cents to 156.00.
Hog futures continued their recent breakdown overnight. Pessimism about the short-term outlook has probably weighed upon prices lately, but the latest drop almost surely reflects news that China is following in Russian footsteps in calling for independent testing of exported U.S. pork for the growth promotant ractopamine. Unlike Russia, China is a sizeable player in the U.S. pork export market. It looks as if traders may ignore the large jump in pork cutout Tuesday afternoon. April hogs skidded 0.22 cents to 82.82 cents/pound in the pre-dawn hours of Wednesday morning, while June slid 0.07 cents to 91.90.
The cotton market continued its Tuesday surge in overnight trading. There was no big news, although bulls may have been encouraged when ICE officials indicated that no fresh supplies had been added to exchange-registered stocks. Wire service sources again cited fresh buying from Chinese interests returning from Chinese New Year celebrations. March cotton rallied 0.47 cents to 82.65 cents/pound early Wednesday morning, while December gained 0.52 cents to 84.35.