After hitting new highs Tuesday morning, it appears that corn may have seen a technical reversal as futures are lower again early Wednesday morning. While traders continue to watch the for the follow-through selling on what may be a key resistance level, the focus for the bulls will be the August 12 supply/demand report. Lack of extreme heat and less rainfall in the forecast will add downward pressure. Valero, one of the largest U.S. refiners, is preparing to sell ethanol for the first time. September corn futures fell 2.25 cents to $4.26/bushel just after sunrise Wednesday, while December lost 2 cents to $4.37.
Soybeans dropped in the overnight session extending losses from yesterday as weather fears seem to be subsiding for the moment. Even so, traders continue to watch changes to the forecasts, particularly for the eastern Corn Belt. NOPA crush will be released this morning with the trade expecting 141.478 million bushels for June which would be the second highest ever for June and 19% over last year’s pace. To date it would bring NOPA crush to 1.497 billion, or 5% over last year. August soybeans fell 5.75 cents to $10.2775/bushel early morning Wednesday, while August soyoil lost .13 cents to 32.27 cents/pound and August meal lost $1.2 to $356.1/ton.
Wheat futures fell hard again overnight after dropping yesterday in response to higher than expect stocks, positive weather, and lackluster export inspections. Egypt continues to buy Russian and Romanian wheat as U.S. wheat is still priced out of the export market. Meanwhile Russian wheat prices has strengthened recently as wet weather in the southern regions is delaying harvest. September CBOT wheat futures firmed fell 8.5 cents to $5.625/bushel at dawn Wednesday, while Sep KC wheat dropped 7.25 cent to $5.54/bushel, and September MWE slipped 5 cents to $5.8625.
In contrast to the free fall in cattle futures this week, Tuesday the buyers returned and buoyed the market. Boxed beef cut-out values continued to slide yet at a decreasing rate. Choice fell by .98 to 236 cents/pound and select dropped 1.29 to 232.70/cents per pound. According to one analyst, if/when choice cutout values fall below the 238 level, as it has, it would signal that beef prices must work lower to sharply lower to help stimulate demand. August cattle gained .52 cents to 147.10 cents/pound Tuesday, while December futures gained .60 cents to 152.20. Meanwhile, August feeder cattle futures rose 3.375 cents to 214.60 cents/pound, and November feeders gained 2.82 to 209.02.
Perhaps it is not coincidental that as grain futures tumbled broadly Tuesday on a better weather outlook, the livestock complex was uniformly higher, seemingly in concert with the lowering of potential feed costs. Producers may see the shift in grains lower due to warmer Jul/Aug weather as a signal to ramp up production under a lower cost environment. Cash hogs seemed to have stabilized in the 77 range as futures seems to narrow the gap in the discount of futures to cash. August hog futures gained 2.02 cents to 75.92 cents/pound Tuesday, while December advanced 2.23 cents to 61.22.
Cotton futures are lower Wednesday morning continuing what has seemed to be a lifeless and directionless trade. Reports of higher than expected production, stocks and exports, as well as weaker Chinese demand have seemed to add a general malaise to the cotton market as it works its way through a glut conundrum. Reportedly, the Intercontinental Exchange (ICE), who owns the NYSE, plans to launch a long-awaited world cotton futures contract later this year after U.S. lawmakers passed a bill eliminating one of the last hurdles. December cotton futures fell 0.46 cents to 65.67 cents/pound, while May raised .05 cents to 65.97.