Most markets have set back from Tuesday’s highs. Greatly reduced deflation fears, resurgent equities and a diving U.S. dollar boosted many of the commodity markets Tuesday, with grain prices being no exception. Little fresh corn news emerged overnight, which seemed to make the market vulnerable to a modest dollar bounce and concurrent drop in crude oil. March corn sank 2.25 cents to $3.835/bushel early Wednesday morning, while July slid 3.0 to $3.98.
The soy complex also slipped overnight. Soybean and product prices vaulted upward as well Tuesday, but lost traction last night. As with corn, U.S. dollar gains and a big crude oil setback seemed to undermine prices. Forecasts for beneficial South American rains likely weighed on beans, whereas renewed palm strength probably limited soyoil losses. Meal demand still seems robust. March soybean futures sagged 4.75 cents to $9.8225/bushel Tuesday night, while March soyoil inched up 0.01 cents to 30.81 cents/pound, and March meal slipped $1.2 to $339.4/ton.
A slew of wheat tenders powered modest overnight gains. Wheat futures joined the bullish stampede Tuesday and continued rising last night. It seemed rather clear that sizeable purchase tenders from Egypt, Saudi Arabia, Iraq, Jordan and others sparked fresh ideas about the strength of underlying demand, which boosted domestic prices despite a general lack of interest in U.S. grain. March CBOT wheat rallied 1.0 cent to $5.1475/bushel in predawn Wednesday action, while March KC wheat gained 0.5 to $5.59/bushel, and March MWE wheat rose 2.0 to $5.78.
Cattle futures came back from early Tuesday losses. Last Friday’s bearish Cattle inventory report seemed to continue weighing on cattle futures yesterday morning, since it suggested surprisingly large fed cattle supplies during the coming months. However, wholesale beef prices rose strongly at noon, while bullish action in the outside markets lent spillover support. Late afternoon GLOBEX action suggests a weak opening today. April live cattle futures rebounded 0.97 cents to 150.57 cents/pound as Tuesday’s CME pit session ended, while August cattle climbed 0.35 cents to 141.97 cents/pound. Conversely, March feeder cattle futures dove 1.20 cents to 199.50 cents/pound and May feeders fell 1.17 to 200.45.
Hog futures ended Tuesday on a mixed note. Chicago traders and many in the hog/pork industry continue looking for a seasonal price bounce, but spot prices have persistently refused to bottom. Deferred futures kept sliding today, but the expiring February future posted a sizeable bounce. That probably reflected the discount already built into the CME quote. Sizeable afternoon pork losses and this morning’s report that weights rose last week seem likely to exert fresh pressure this morning. April hog futures closed down 0.05 cents to 70.87 cents/pound Tuesday, while June hogs slumped 0.50 cents to 82.62.
Cotton futures proved mixed Tuesday night. In addition to the general bullishness experienced yesterday, the cotton advance had a major technical component as well, since the nearby March future decisively broke out above the pivotal 60-cent level. Bulls are almost surely hoping for a follow-through rally, but only the March contract could sustain gains overnight. The recent lack of news suggest outside influences will drive market action today. March cotton futures edged up 0.10 cents to 61.55 cents/pound shortly after sunrise Wednesday, while the July contract skidded 0.10 to 62.18.