Corn futures settled steady to fractionally higher. Futures traded both sides of unchanged with strength in wheat providing support while uncertain demand for corn held gains in check. Weekly ethanol production slowed from the previous week to 803k barrels per day, down from 811k the previous week to the lowest level in six weeks. However, ethanol stocks fell slightly. More unwanted rain is forecast for Argentina over the next several days as producers wait to complete planting. December corn futures closed 1/4 cent higher at $7.60 1/4. March was steady at higher at $7.64.
The soybean market slipped lower on Wednesday, bringing a halt to the three-day streak that was marked by strong price gains. Those gains were attributed to worries about South American planting weather and renewed talk of Chinese buying interest. With crude oil and gold markets experiencing price setbacks today, profit taking emerged to pressure beans. However, USDA announced that China bought 290,000 tonnes overnight, and that news provided a buying floor under the market. At the close, January lost 3 cents at $14.46 1/4. New-crop November fell 5 3/4 cents to close at $13.05. January soybean oil fell 3 points to close at 50.38 cents. January meal was down $0.70 per ton at $432.70.
Wheat futures came back from early losses following yesterday’s sharp gains and managed to close higher once again on Wednesday. Prices were off the day’s highs, but still towards the upper end of the range. Continued rumblings about Brazil buying U.S. hard red winter wheat remain a factor. Those rumors are what sparked Tuesday’s big surge. Today there are reports that U.S. wheat is not yet competitive with Argentine wheat from Brazil’s perspective, but that Brazilian needs are high enough that as Argentine supplies become more pricey and with possible quality issues to boot due to excessively wet weather during harvest, they will indeed be sourcing wheat from the U.S. and Canada, perhaps up to 2 million metric tons. Coupled with the very poor condition of the U.S. winter wheat crop, the fundamentals may indeed be turning bullish again for wheat. At the close, CBOT December was up 3 at $8.76; KCBT December up 2 ½ at $9.18 ¼; and MGE December is up 2 ½ at $9.38 ¾.
Cattle futures were choppy early but gradually eased as the trading session progressed. The market continues to burn off the overbought condition developed during last week’s sharp rally. No further cash trade has evolved after light trade in Texas on Monday at $128. Beef prices were higher Wednesday morning. Lacking other definitive news, concern about beef demand is a limiting factor. February cattle closed 67 points lower at $131.65.
Lean hog futures settled with big gains on Wednesday. The December contract posted a gain of $1.45 and settled at $83.83. That is the highest close for the December contract since last March. The June contract gained 88 cents and settled at $101.08, its highest close since early October. The rally in hog futures since early September has been impressive with the December contract gaining more than $12. Futures traders are responding to strong cash hog prices which are up $15 from 2 ½ months ago. Typically cash hog prices bottom out in November, but not this year. With solid retail demand ahead of the upcoming holidays we could see both cash and futures prices increase for at least the next couple of weeks.