Corn futures backed away from early highs late Wednesday morning. We suspect the release of the latest weather model results depressed soybean futures, due to suggestions of improved Argentine rainfall this weekend, which in turn dragged the corn market downward. Traders may soon begin adjusting their positions ahead of the weekly USDA Export Sales report to be released early tomorrow morning. March corn had risen 4.75 cent to $7.0975/bushel around midsession Wednesday, while December skidded 1.5 cents to $5.5475.
Soybean futures had risen rather substantially early Wednesday morning, but suffered a sharp setback around midmorning. The drop was seemingly sparked by the release of the latest weather model results, since those apparently implied improved precipitation prospects for dry Argentine soybean fields this weekend. On the other hand, South American forecasts for early March are not encouraging, so bulls are not completely abandoning the long side of the soybean pit. March beans gained 4.5 cents to $14.5225 as lunchtime approached Wednesday, while March soyoil had dipped 0.04 cents to 48.98 cents/pound, whereas March meal had gained $1.8 to $429.5/ton.
Wheat futures proved surprisingly firm in the face of fading corn and soybean quotes Wednesday. The fact that the golden grain markets have already suffered a substantial weather-related breakdown may partially explain their relative strength. Bulls may still be anticipating accelerating exports due the comparative cheapness of American products. March CBOT wheat futures had climbed 8.75 cents to $7.145/bushel late Wednesday morning, while March KCBT wheat rose 9.0 cents to $7.4175, and March MGE futures advanced 6.5 cents to $7.955.
Cattle futures appeared to surge Wednesday in belated reaction to the Monday blizzard. Those wintry conditions probably stressed feedlot cattle while limiting sales and shipments to beef packers. The impact of that weather may only have become apparent Tuesday afternoon, when beef cutout values jumped sharply. Such winter storms sometimes curtail market-ready supplies of fed cattle for weeks, which in turn can power a substantial rally. We’ll have to wait and see if that will be the case this year. April cattle climbed 0.85 cents to 130.15 cents/pound in late-morning activity, while August gained 0.37 cents to 125.92. Meanwhile, March feeder cattle ascended 0.50 cents to 141.67 cents/pound, but August was unchanged at 154.40.
Talk that pork packers may curtail their Saturday kill due to weak demand undercut CME lean hog futures again Wednesday morning. Indications of early cash weakness probably weighed upon the market as well. Bulls are probably hoping the wholesale market will follow the upward push made by fed cattle Tuesday afternoon. April hogs had slipped 0.30 cents to 81.27 cents/pound late Wednesday morning, while June dropped 0.17 cents to 91.15.